company profile
When Phil Knight founded Nike in 1964 for $500, he never dreamed that it would become the largest sports shoes brand in the world. This paper will reveal the mystery of Nike's growth process, and focus on the key to Nike's great brilliance in the 1990 s-new product development strategy.
In 1972, Knight and Ballman finally invented a kind of shoes and decided to make them themselves. They contracted the production task to Asian factories with cheap labor and named the shoes Nike, which was named after the Greek god of victory. At the same time, they also invented a unique logo Swoosh (meaning "whoosh"), which is extremely eye-catching and unique, and every Nike product has this logo.
In short, Swoosh is the logo of NIKE.
Early days: 1960s-1970s.
When it comes to the history of Nike, it must be traced back to 1958. At that time, Phil Knight, the founder, was only a track and field team player of Oregon State University, and often complained to the coach Bowerman that the United States had never produced a really good pair of sports shoes during practice. Knight majored in accounting and returned home to teach in Portland after graduation. 1964, Knight and his coach Bormen each invested $500 to set up a sports shoes company named Nike, which comes from Greek and means "victory".
In the early days of the company's founding, Knight used his relationship in the sports field to shuttle back and forth in various track and field venues and set up stalls to sell his running shoes. At that time, the products were purchased from Japan, and he often thought that American-designed sports shoes must have unlimited potential. In the early 1970s, Knight began to implement the idea of designing his own shoes. At the same time, after careful research and investigation, he found that the market demand was enough to support him to establish his own production line. However, in the end, it was decided to draw on Japanese production experience. 1972 Knight signed the first contract with Japan to formally produce Nike sports shoes designed entirely in the United States.
In the following years, the yen continued to appreciate, and the labor cost was high, which made the cost of producing shoes in Japan higher and higher. At this time, Nike has accumulated stable overseas production experience and extended its reach to manufacturers in more countries. In order to reduce the production cost, Nike moved the Japanese production line to South Korea and Taiwan Province with relatively low labor costs in 1975. After the cost is greatly reduced, Nike has more abundant resources to engage in research and development and marketing activities.
Nike expanded its OEM business from countries with low labor costs, which was a revolutionary initiative in the industry at that time. Nike knows that the production of shoes must inject intensive labor, so it is inevitable to seek low-cost OEM overseas, and there is no room for change. Nevertheless, overseas OEM still has its risks, and the difficulty of quality control is increased due to the distance and cultural gap in different countries. Therefore, when Nike places a large-scale order to a foundry, it often goes through a very careful evaluation process to ensure that the finished product can meet the quality standards of Nike.
During this period, Nike's strategic focus was entirely on:1establishing the best overseas production and operation mode; 2. Explain the new design and style for the OEM; 3. Maintain quality standards
Facing Dilemma and Striving for Prosperity: 1980s
In the early 1980s, Nike made a big profit, and continued to play the role of a professional manufacturer of sports shoes in the United States, but did not own any production plants in the United States. Soon, the number one competitor, Reebok, followed suit. Founded in 198 1 year, led by the founder and CEO Paul Fireman, he emerged as a dark horse and launched sports shoes with novel design and strong momentum, which successfully swept some markets. By the mid-1980s, Reebok had been able to compete with Nike in the fierce competition. 1987, Reebok by going up one flight of stairs, with sales of $9.9 1 100 million and 30% share, rose to the top of the sports shoes market at one fell swoop, while Nike was behind with $597 million and 18% share.
In the battle between Nike and Reebok, the problems and opportunities lie entirely in the changeable target market and the essence of design orientation. In other words, young people (teenagers and young adults) have bought not only sports shoes, but also the "fashion sense" represented by shoes themselves. Both the two shoe giants realize that if they want to expand the market scale, they must transfer the original concept of professional sports shoes to a broader market of "fashion-seeking" teenagers and young adults. Reebok Cave took the lead and entered this gold market first, giving Nike a heavy blow with superior products and aggressive public relations activities. Filmon, CEO of Reebok, once publicly criticized Nike: "Knight is just a shoemaker and always thinks he is a great athlete.". Knight responded contemptuously: "I hate Reebok because its research and development system is simply a counterfeit machine."
In order to counter Reebok's provocation, Nike made up its mind to invest a huge sum of money in the research and development of new products. The most popular classic product was The Nike Air Shoe in the late 1980s. John Horan, a critic, once expressed his views on Nike air shoes in the special issue of American sports industry: "In fact, it is a simple and easy-to-understand shoe-making technology, which only needs to inject air into the sole to form an elastic insole, and that's all." Nike gas shoes were not officially launched until the early 1990s, and they achieved unprecedented success. Therefore, the 1980s was an era when Nike faced difficulties and made great efforts to revitalize itself. During this period, Nike suffered fierce competition in the market, from which the strategic theme of new product development and design in the future was established.
Climb to the top: the 1990s.
Nike gas shoes went on the market with great momentum, and paid millions of dollars to hire NBA superstar Michael Jordon as the product spokesperson to engage in various marketing and advertising activities, setting a new high in the sponsorship price of sporting goods in history, which was admired by the whole world. The advertising appeal is tied up with Nike gas shoes, Jordan's image and almost magical basketball skills. Since then, Nike has gradually recovered its lost ground in the market. Reebok was forced by the situation and hastily launched "Reebok Pump Shoe", with Shaquille O'Neal, the second most popular star in NBA, as the spokesperson, but it was a pity that the tide was gone. At this time, Nike's share increased from 25% in 1989 to 28% in 1990, while Reebok dropped from 24% to 2 1%. This counterattack was surprisingly successful, which made Nike deeply realize that promotion is indeed the most powerful magic weapon of the brand. Therefore, in the following years, Nike constantly increased its investment in this area. For example, in 1995, Nike spent as much as1000 million dollars on Sports Marketing, while Reebok was close to 400 million dollars.
Nike's sports marketing
Following Michael Jordan's sponsorship activities, he signed Tiger Woods, the superstar of golf, at a sky-high price, 1996, and signed a contract with the Brazilian football team of 200-400 million US dollars in 10 years, setting a historical record of the highest price of sponsorship activities in the world football, including buying the TV rights of five world-class championships of the Brazilian national team. Since then, the Nike hook logo has appeared in many world golf tournaments,198 World Cup and the TV broadcast of Sydney Olympic Games in 2000.
Sports marketing is the main force of Nike, but it also attaches great importance to brand communication. From 1980s to 1990s, Nike firmly grasped the pulse of the target market-youth, personality and teenagers who challenged the reality. All Nike products highlighted its "hook" brand logo, and at the same time developed the communication theme of "Just Do It". With the advertising slogan of "Win in your way", it was endorsed by the world's top sports superstars, which quickly captured the hearts of young people around the world. Nike's products are not cheap. In the United States, the selling price of a pair of sports shoes can be as high as 100 US dollars. This high-priced strategy has laid a lot of ground for Nike, but it has also brought great trouble. Some American civil organizations have launched protests and forced Nike to raise the wages of shoemakers in overseas factories. Although Nike is not heartless, business is still business, and Phil Knight has no intention of giving in.
After the unprecedented success of gas shoes in the market, Nike has deepened its efforts in research and development of new products. In just one year, more than 300 new styles have been listed in the American market. Nike declared: "Scientific product research and development is one of the key factors for Nike's success, and we spare no effort in developing new shoemaking materials, fibers and modern designs". To put it another way, the driving force for Nike to concentrate on new product research and development still lies in the behavior and attitude of target consumers to seek novelty and change. In fact, Nike is not the only one in the industry that pays special attention to the research and development of new products. Many well-known brands have no choice but to keep innovating their products in order to grasp the young people's pursuit of fashion.
During the 1990s.
The backbone of Nike's marketing-the depth and breadth of market research aimed at teenagers are beyond the reach of other brands in the sports shoes market, which makes Nike's share grow continuously. 1996 climbed to 43% (Reebok 16%), and the sales in the US market alone exceeded $3 billion.
Welcome to the new era: 2000
Looking at the whole 1990s, Nike's rapid development has two main directions:1expanding global sales and achieving substantial growth; 2. Develop non-footwear sporting goods, such as sportswear and sports equipment.
196 Nike's global sales reached $9 billion, making it the largest sports product manufacturer in the world. At the end of 1990s, Nike suffered a short setback because teenagers gradually regarded sports shoes as a kind of fashionable leisure shoes. In addition, the economic recession in Asia was also a serious blow to Nike, which led to excessive inventory and decreased profits, so it had to take measures to streamline personnel. However, Nike authorities were still quite optimistic about the future development. Phil Knight retired as the president of Nike Group, and the CEO's stick was handed over to Tom Clarke. The new CEO also has a wonderful description of the company's future development:
"Nike has grown rapidly, and once it hits the economic downturn, we need some time to adjust. Please don't forget that we are a group of Nike people with high self-requirements. The company's operation is long-term and sustainable, not just to make everyone clap their hands and be happy in the next few years. "
Indeed, Nike's sports products and clothing, whether it is research and development technology or brand marketing, may set off another wave of climax in the global market at any time and continue to maintain the number one position in the world.
Analyze the key point of developing new product strategy-lead consumers, don't let consumers lead by the nose.
The first step to examine the success of Nike's new product development strategy is still inseparable from the basic principles of marketing-mastering the market pulse, understanding customer needs, and creating new products that cater to and meet the needs. But we must understand that the biggest problem in developing innovative new products is that consumers will not take the initiative to ask for the new products beforehand. In other words, you must lead consumers and don't let them lead you by the nose.
You can recall that in the early 1970 s, before conducting research on the needs of new customers, how many consumers would take the initiative to ask for products such as video recorders, fax machines and microwave ovens? Creative enterprises can often make good use of their rich imagination, dig out unclear consumer needs and walk in the front end of consumption trends, rather than being a follower of others.
In order to explore market opportunities, we must have a deep understanding of consumers' needs, lifestyles and aspirations, and we must also have some creativity. Who would think that there is no market for pocket translators aimed at tourists' language barriers? How do enterprises get the original idea of this demand? The answer is to try our best to get close to and observe the customers with the most urgent needs, and make further contact with them. For example, Sanye of Japan displayed music equipment in London, so that outstanding musicians in Europe can experience the most advanced music hardware personally. The purpose is not only to learn more about customers, but also to show advanced product technology.
Because Nike can fully grasp the young people's demand for sports and leisure shoes, understand their life style and realistic psychological desire, and develop creative new products, communication demands and promotional activities, Nike has always been at the forefront of creating consumption trends, and Nike's world number one is not a hollow reputation.