Posted At: October 27, 2008 12:19 PM
by Jessica Ayers
When you think of Nike, you probably think Tiger Woods, Roger Federer, Michael Jordan. Maybe you think of the “Swoosh” or Nike+ running gear.
You probably don’t think human rights lawsuits or outrage over commercials. But Nike had to deal with all kinds of legal issues and ensuing image management problems.
You probably don’t think small town Oregon, Japanese track shoes or waffle iron shoe treads. But that is where Nike started.
How did a University of Oregon track coach and his athlete take selling shoes out of the trunk of his car to Nike Inc., the company that reported record revenues of $18.6 billion in the fiscal year ending May 31, 2008?
A history: The early years
According to Nike.com, Bill Bowerman, University of Oregon track coach, was obsessed with making his team better. He left nothing untouched, not the track, the water or the shoes. Bowerman even made shoes himself for his athletes to wear.
Phil Knight, a runner on Bowerman’s Oregon track team and recipient of an MBA from Stanford University, was also looking for innovation in athletic equipment. However, Knight believed that shoes could be manufactured in Japan to compete in an athletic market dominated by German track shoes.
After graduation, Knight traveled to Japan and made a gutsy call on Onitsuka Co. that ended in a deal for Knight to distribute Onitsuka’s Tiger running shoes in the United States.
When Bowerman found out, he saw potential and partnered with Knight in 1964.
The two were made for each other. The discipline of elite athletes in pursuit of perfection became the foundation of the partnership that would one day become Nike, Inc.
They formed Blue Ribbon Sports and sold shoes out of Knight’s car while both worked at other jobs. Jeff Johnson joined the duo in 1965 to market the shoes. Johnson set up a mail-order system and produced the company’s first advertisements to complement Blue Ribbon Sports’ already established relationships with local high school and college track teams.
Nike and the “Swoosh”
Bowerman continued to experiment with ways to improve the quality and performance of the shoes, and not even his wife’s waffle iron was sacred. When Nike’s relationship with Onitsuka Co. began to falter, the innovators were ready with a lightweight track shoe with nubs on the outsole inspired by the pattern on a waffle iron.
Johnson came up with the name “Nike” for Blue Ribbon Sports’ line of shoes in 1971, and Knight paid a young college student $35 to design the logo now known as the “Swoosh.”
Despite the success of these unique shoes locally, Bowerman still was not satisfied. Mark Parker, Nike president and CEO who worked his way to the position from designer, told CNBC in the network’s special “Swoosh! Inside Nike,” that Bowerman would weigh newly designed shoes on a postage scale in board meetings and say, “Is this the best you can do?”
To launch Nike shoes nationally, Blue Ribbon Sports chose track athlete Steve Prefontaine as the first athlete to endorse the line.
Prefontaine’s success on the track was unparalleled, and his success as brand ambassador for Nike shoes was equally impressive. Prefontaine challenged Blue Ribbon Sports to keep pushing toward perfection in creative innovations while making appearances on behalf of the company and sending shoes to promising young athletes with notes of encouragement.
Prefontaine was only the first in a long line of successful brand ambassadors for the company now known as Nike Inc.
So, how did a University of Oregon track coach and his athlete take selling shoes out of the trunk of his car to Nike Inc., the company that reported record revenues of $18.6 billion in the fiscal year ending May 31, 2008?
Public relations strategy. Although, like many young companies, Knight and Bowerman may not have called what they were doing public relations, all those in the PR world today would do well to take notice of the successes of Nike’s early communications. Blue Ribbon Sports accomplished great things by answering two main challenges: proving the quality of the shoes and proving the company’s commitment to the athlete.
A clearly defined mission
Bowerman’s obsession was his mission in business: to make the highest-quality shoes available to athletes.
The mission of Blue Ribbon Sports’ public relations in those early decades, therefore, was to prove the quality of the shoes and the company’s commitment to the athlete.
Narrowly defined objectives give a campaign focus. Instead of jumping on every good idea, all efforts can be concentrated on making steady steps forward through communications. Instead of chasing more endorsement deals or immediately expanding into shoes for other sports, Blue Ribbon Sports was able to focus on effectively establishing the company’s image.
A clearly defined public
Blue Ribbon Sports’ public was athletes. As a company founded by track athletes, Blue Ribbon Sports knew the public and how to reach it.
Small companies are often founded by people who know their public well, but the importance of research in today’s larger companies cannot be stressed enough. A campaign without knowledge of its target is ineffective at its best and disastrous at its worst.
Success strategy 1: Proving quality through established relationships
Proving the quality of its shoes was the simpler of Blue Ribbon Sports’ two main challenges.
Track athletes — especially those in the Oregon area, where Blue Ribbon Sports was located — had an established relationship with Steve Prefontaine. As an elite collegiate runner, Prefontaine’s reputation lent credibility to the young line of shoes.
Previously established relationships can be just as valuable today. Associating a company with a person or group with an established reputation can be powerful. Although endorsement deals are a dime a dozen, hosting a joint event or giving a donation to a local nonprofit or a government official says something to the public.
Success strategy 2: Proving commitment by building relationships
Blue Ribbon Sports had to forge relationships with its public from nothing, making this goal more difficult than the last.
Knight started building these relationships by going to the athletes and offering them a face and a product. By selling Tiger shoes at local track events, Blue Ribbon Sports offered buyers a personal experience, and so proved how the company valued the athlete while cultivating the athlete’s personal loyalty to the company.
Blue Ribbon Sports also placed a premium on receiving feedback from all athletes on ways to improve their shoes. Knight and Bowerman spoke to local athletes and Prefontaine alike and took all suggestions seriously, again proving the company’s commitment to athletes.
Personal connections with a public are irreplaceable, and Blue Ribbon Sports’ success in this area is a great example of connecting through customer service. Wal Mart offers a similar example of personal connections through customer service on a large scale by employing greeters at each of the stores. Other ways for large companies to create personal relationships can be through sponsoring events unrelated to your company or participating in philanthropic efforts.
The first two decades of Nike saw remarkable growth through focus, branding and relationship building, but the company hit speed bumps in the next two decades.
In the next article in this series, Nike will pass Adidas as the number one brand in the United States and it will deal with crises that lead to success in social responsibility.