Nike brand analysis

In the next few minutes, we use behavioural economics to explain five characteristics that have made Nike one of the world’s most successful brands. In doing so, we go beyond the typical SWOT analyses that you’ll see online to discover a little more about how the brand creates a positive impression on consumers. We cover the brand’s essence, celebrity associations, brand innovation and exposure as explained in our guide on how to measure the value of a brand.

So, without further ado, let’s get stuck in…

Brand Essence

Nike began in 1964 founded by a track athlete called Phil Knight and his coach Bill Bowerman. Originally named ‘Blue Ribbon Sports’, the pair began distributing Japanese brand ‘Onitsuka Tiger’ shoes (now Asics) until 1971.

Blue Ribbon Sports then became Nike in 1971 after Jeff Johnson, Nike’s first employee, suggested naming it after the Greek goddess of victory. This coincided with the company’s first shoe launch brandishing the famous swoosh, which was trademarked a few years later in 1974.

The Swoosh’s design was not the result of a major agency brief, but a student studying graphic design called Carolyn Davidson, who met Knight at Portland State University when he was teaching accountancy. Davidson created charts and presentations for Blue Ribbon Sports before progressing to create posters, adverts, and the logo.

Her brief was to create a stripe (a term used for a shoe logo) that incorporated something to do with movement. She subsequently created five designs, with the Swoosh resembling a wing and hinting at the Greek god Nike, the winged goddess of victory.

Bowerman and Knight’s vision for building a rewarding culture and cherishing the ideas of others was then required through the company’s IPO in 1980 followed by the competitive turbulence of the following decade. Bowerman was known for his passion for product innovation, while Knight became famed for his charismatic leadership, emotional intelligence and business acumen.

Emotional Resonance

Nike began its agency relationships in 1976, when the creative demands began to exceed Davidson’s capabilities. The team hired John Brown and Partners from Seattle, which inspired the company’s first brand advert the following year called ‘There is no finish line’. This didn’t feature a product, but cultivated the brand’s emotional appeal.

Its success propelled Nike to 50% market share in athletic shoes in the US by the end of 1980. It also demonstrated the value that agencies could bring in developing the brand’s emotional appeal. This can be seen a few years later in 1982, with what is reported to be Nike’s first TV commercial. The brand’s ability to connect with a runner’s mindset is paired with the company’s commitment to innovation.

Nike subsequently began a relationship with Wieden and Kennedy in 1988. Dan Wieden then coined the term ‘Just do it’, crediting the inspiration to American Criminal Gary Gilmore who worded ‘Let’s do it’ before his execution in 1977. The agency’s subsequent advertising campaign was supported by promotional activities across a broad range of channels, with the slogan’s appeal attributed to being both universal and intensely personal.

Nike’s ability to draw on Wieden and Kennedy has been a feature of the brand’s success until the present day, providing the necessary creativity to push the brand further by taking positions on key societal issues. Nike famously supported Colin Capernick after the NFL player kneeled during the national anthem to highlight social injustice. Capernick then became a leading figure in the company’s ‘Dream Crazier’ campaign in 2019.

Celebrity Associations

Nike’s ability to build an emotional resonance has been entwined with its careful selection of celebrities to front its campaigns. This began with a charismatic Romanian tennis player, Ile Nastase in 1972, although it wasn’t until years later that the process became finely tuned.

The seminal moment was the signing of Michael Jordan in 1984, representing a pivotal turning point in the company’s success. Adidas was surging, while Reebok’s sales were outstripping Nike’s, which called for a major partnership and a new product line.

Nike’s success was also inspired by lesser known celebrities. Walt Stack, a famous community runner in San Francisco became the feature of the company’s first ‘Just do it’ TV commercial in 1988. Stack was still running marathons and ultramarathons in his 80s, and this cult status provided the necessary emotional context to introduce the phrase to a mass audience.

Nike’s global expansion in the 1980s also led to the development of a comprehensive network of celebrity ambassadors across a broader range of sports. To date, many of the world's most famous sports personalities outside of running and American sports have worn Nike, including Roger Federer, Maria Sharapova, Tiger Woods, Serena Williams and Cristiano Ronaldo. Nike has also extended beyond the world of sport, teaming up with many of the world’s leading musicians and actors, including Drake, Will Smith and Billie Eilish.

Brand Innovation

Nike’s heritage in product innovation can be attributed to Bowerman from the beginning. His obsession with performance led him to calculate the benefits of using lighter shoes over prolonged distances, and the subsequent use of waffle-ironed rubber that was both durable and lightweight. This debuted in the first track shoe Nike released in 1972, eventually being named Nike Cortex.

This was followed up by the introduction of the Tailwind shoe in 1978, which introduced the now infamous ‘Air’ technology to the public. Frank Rudy, an aerospace engineer, believed that the foot’s impact could be reduced by supporting the mid-sole with a pocket of air in the form of an airbag. Having been rejected by other manufacturers, it required Bowerman and Knight's vision to make it a reality.

This technology later evolved to become the Nike Air Max range in 1987. This incorporated a visible urethane pouch filled with gas to the heel of the shoe. It was inspired by Tinker Hatfield, who had joined Nike in 1981 to originally help with store design. He believed architectural principles could be applied to footwear.

Hatfield’s status was then cemented following his work on the Air Jordan 3. He overcame design concerns associated with the shoe’s predecessors, with fears growing that Jordan would move to Adidas. The shoe's success was astounding, leading to the creation of a new Air Jordan shoe for almost every year until today. Hatfield continues to oversee the company’s approach to design.

Nike also became known for its approach to retail store design, with the first Niketown store launching in Oregon in 1990. Nike’s transition to digital commerce was also seamless, with the launch of its first website in 1999. This was followed by an app in 2006 along with a move into tech products with the Nike + iPod sports kit launching in the same year. The device tracked a runner’s stats once added to a runner’s shoes.

With the brand’s digital influence growing, Nike then acquired data companies Zodiac in 2018 followed by Celect in 2019 along with a key strategic decision to stop selling directly through Amazon to build closer relationships with its customers. The company then moved into new arenas with the acquisitions of virtual shoe company RTFKT Studios, and machine learning company Datalogue in 2021.

Brand Exposure

Nike’s history reflects a brand that truly understands its customers, delivering industry-leading innovation in the process. However, were it not for the marketing budgets associated with these activities, the brand would not be where it is today. This is reflected in annual budgets (reported as Demand Generation Expenses) that topped $1bn from 2001, reaching more than $3bn in 2021.

These budgets have allowed Nike to develop a highly integrated marketing strategy across the globe, and build its resilience as one of the world’s most socially valuable brands.

Implications for marketers

Nike’s 50-year history has been characterised by the strength of five brand characteristics, which have underpinned the brand’s ability to continually reinvent itself in one of the most competitive consumer markets. Yet, despite this, Nike continues to require major global marketing budgets to stave off the threat of new entrants and to remain relevant in the mind’s of consumers.

This success can be attributed to the brand’s essence. Although Bill Bowerman left in 1999, followed by Night years later in 2016, their legacy continues to underpin many aspects of Nike’s culture and success today.

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