Phil Knight, the founder of Nike, is a pioneer in the world of athletic shoes. In 1964 when he and Bill Bowerman founded the company, Knight took a product which had been viewed as an optional accessory and turned it into a necessity that everybody owns today. He is a visionary business man because he changed how products are manufactured and marketed in the world. Today, Nike is a $69 billion dollar company. Here are some of the strategies Knight used to make Nike so successful:
Keep costs down
One of the ways that Phil Knight turned Nike into a global brand was by keeping costs down. Knight was a pioneer in outsourcing jobs to places with cheap labor. Knight focused his manufacturing operations in Asia. There he could pay people much less than workers in the United States. Nike came under fire by many critics for paying people less than $10 a day to work. His critics overlooked the fact that he was often doubling the wages of the people who were employed in factories that made Nike products. His innovative strategy helped him build a business empire, create jobs for desperately poor people and deliver high quality products to customers at a reasonable price.
Find innovative ways to brand yourself
In Nike’s early days the company did not have a huge marketing budget. Knight realized that it would be impossible for his company to buy expensive television and magazine advertising spots. Knight decided that he could get onto the cover of Sports Illustrated by paying athletes to wear his brand. Before long Nike was getting the same positive recognition through its athletes that it could by using conventional advertising. This strategy gave Nike good exposure at a fraction of the price of advertising through conventional media. Today Nike continues to use this strategy; Nike athletes include: Michael Jordan, LeBron James, Tiger Woods, Kobe Bryant and Roger Federer.
Sell a fantasy
Knight quickly realized that exposure was not the only thing he was getting by directly working with athletes; he was selling a fantasy. Implicit (or explicit) in many of Nike’s commercials is the notion that using Nikes will let an amateur athlete perform like his/her athletic heroes. One of Nike’s most successful attempts at selling the fantasy of sports stardom came with release of Michael Jordan’s “Air Jordan” line of sneakers. Nike went so far as to get the shoe banned by the NBA. The company failed to mention in commercials that shoes were not allowed because they violated the color scheme of the uniforms. Nike made it seem as if the shoes gave Michael Jordan too much of an advantage over his competition. Below is a sample advertisement that Nike used to sell this myth:
Phil Knight is a marketing visionary who turned what is usually a fatal weakness in launching a product (a lack of advertising dollars) into a stunning success by associating it with sports stars who gave his shoes an aspirational glow.