Hey, what’s up, guys? This is Brand Breakdown, and I’m your host, Matt Young. Brand Breakdown is a show where we take a company, breakdown its brand perception, and paint a picture of how people came to perceive it that way. If you want us to review your brand, drop a comment or email me at firstname.lastname@example.org.
Today’s brand is Nike, the branding powerhouse behind names such as Air Max, Air Jordan, and Converse. The iconic swoosh logo is recognizable all over the world and is valued at $26B, completely separate from the rest of the company.
Nike is known for its branding above anything else. If you think it’s because they make great shoes, did you know they don’t make their own shoes? They don’t own a single factory to make shoes. They outsource their work primarily to other manufacturers in China, Vietnam, and Indonesia. People love the Nike name so much that it doesn’t matter who makes them. So how did they become so well-known?
From 1964 to 1971, Nike operated under the name “Blue Ribbon Sports” selling other shoe brands until they decided to launch their own shoes under the Nike brand name. In 1971 when Nike became Nike, they also hired Carolyn Davidson, a graphic designer to design their logo for only $35. That’s roughly $220 in today’s currency.
In 1988, Nike hired the Wieden+Kennedy ad agency who came up with their famous tagline, “Just Do It.” Ever since, it’s appeared everywhere from apparel to commercials and has become a saying general enough to resonate with just about anyone anywhere in the world.
These are the two cornerstones of Nike branding besides selling quality clothing products. Of course, they, like every other major company out there, profit from controversy. Let’s look at a few:
Did you know that Colin Kaepernick is a spokesperson for Nike? He has consistently made the news for his stances on police brutality. At first it was assumed that bringing him onboard was a bad PR move, however, it seems to have benefitted Nike in the long run with a 31% boost in sales after the, “Believe in something even if it means sacrificing everything.” campaign.
On the other end of the spectrum, A former Nike athlete says, “When I first arrived [at the Oregon Project], an all-male Nike staff became convinced that in order for me to get better, I had to get thinner, and thinner, and thinner.” This was Mary Cain, one of the world’s top mid-distance runners for her age when she was only 18. After being recruited to Nike, she recalls, “This Nike team was the top running program in the country, and yet we had no certified sports psychologist. There was no certified nutritionist. It was really just a bunch of people who were Alberto’s friends.” Nike’s Alberto Salazar has denied many claims that Mary Cain has made, but he has been banned from track running for 4 years on doping charges, and the now-former CEO of Nike, Mark Parker, has stepped down as CEO in response to these allegations.
Related more to their products, Nike released a shoe called the Vaporfly that has proven to increase running performance. Using a blend of carbon fiber and a special polymer, it eases the force placed on a runner’s legs. This has been called out in the running community as a form of “technological doping,” but the shoes have officially been granted permission to use in the 2020 Tokyo Olympics, assuming they still happen.
As far as creating their products goes, we briefly touched on the fact that they don’t manufacture their own shoes. Nike sources their products from countries such as China and Mexico who have lax standards when it comes to employee treatment. Over the years, Nike tried to improve their compensation for workers that create their products, but as recently as 2011 Nike themselves admitted that some of the factories producing their Converse shoes did not meet Nike’s internal standards for employee treatment.
Off-Shore Tax Haven
In 2017, Nike along with a myriad of other companies and celebrities were exposed for using a Dutch tax haven to avoid paying their fair share of taxes. Nike did this by transferring the ownership of their swoosh trademark to a subsidiary, Nike International ltd, which was based in Bermuda. Nike used this shell company to charge their main company a fee for the branding rights to the Nike swoosh. This bill changed Nike’s taxable profits to completely un-taxable profits for the subsidiary company.
Even with all this, people still see Nike as a brand that represents athletes and high quality clothing at affordable prices. They’re the cleats for little league baseball players and the MLB alike. You can find your uncle wearing a Nike shirt at family reunions, and collectors go wild over new releases of Air Force shoes.
If you like our content about branding, want us to review your brand, or want to work with us, please let us know in the comments or by emailing me at email@example.com. This has been Brand Breakdown with your host, Matt Young. Peace.