Branding Theories and Critical Analysis of Nike Inc.

CRITICAL ANALYSIS OF NIKE INC
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Table of Contents Critical Analysis of Nike Inc. 3 Executive Summary. 3 Introduction. 4 Background of Nike Inc. 4 Justification for Choosing Nike. 4 Literature Review.. 5 Organizational Brand Identity and Image Theory. 5 Aaker's Brand Equity Theory. 5 Brand Positioning Theory. 6 Brand Architecture Theory. 6 Emotional Branding Theory. 6 Brand Extension Theory. 6 Sustainable Branding Theory. 7 Brand Personality Theory. 7 Brand Community Theory. 7 Co-creation and Customer Engagement Theory. 7 Brand Experience Theory. 8 Brand Authenticity Theory. 8 Brand Coherence Theory. 8 Application. 9 Evaluation of Nike Inc. 9 Recommendations. 10 Short-term Recommendations for Nike Inc. 10 Long-term Recommendations for Nike. 11 Reference List 12 Appendix: Nike's Diverse Product Categories. 14  Critical Analysis of Nike Inc.
Executive Summary
* Nike Inc. is a worldwide athletic footwear, equipment, apparel, and accessories manufacturer, operating in multiple markets globally.
* The brand's strong and recognizable identity, represented by the iconic "swoosh" logo, has contributed to its global success.
* Brand awareness, loyalty, physical quality, and strong brand partnerships build Nike's brand equity.
* The company's diverse market architecture, including the Nike, Jordan, and Converse sub-brands, offers various products to cater to multiple consumer segments.
* Nike's marketing and advertising strategies are highly effective, utilizing traditional media channels, social media platforms, and strategic endorsements to engage consumers.
* The brand has successfully extended its presence beyond athletic footwear and apparel, diversifying into lifestyle and fashion markets while staying true to its core values.
* Consumer perceptions of Nike are mainly positive, with the brand resonating with athletes, trendsetters, and fitness-conscious individuals.
* Nike faces sustainability and ethical manufacturing challenges, requiring continued efforts to address these concerns and maintain consumer trust.
* Nike should continue leveraging its brand strengths while adapting to evolving consumer preferences, embracing sustainability, and capitalizing on emerging market opportunities.
Introduction
This report critically analyzes Nike Inc., a universal giant in athletic footwear, equipment, apparel, and accessories. Besides, Nike's dominant position in the market, strong brand identity, and global recognition make it a significant brand subject to examination.
Background of Nike Inc.
Nike was founded in 1964 as Blue Ribbon Sports and rebranded as Nike Inc. in 1971. The company has since become a multinational corporation with a significant global presence. Nike's success can be attributed to several factors: Firstly, Nike's iconic "swoosh" logo and powerful brand identity have played a pivotal role in its success. The brand represents inspiration, performance, and innovation, appealing to athletes and sports enthusiasts globally (Yao and Chen, 2019). Secondly, Nike consistently demonstrates solid financial performance, with high revenue growth and profitability. Its ability to generate substantial sales and maintain a competitive edge solidifies its position as a market leader. Thirdly, Nike is committed to product innovation as it continuously introduces cutting-edge technologies and designs, catering to the ever-evolving needs of athletes and consumers (Standaert, 2022). Fourthly, Nike's marketing and advertising campaigns have effectively created emotional connections with consumers. The brand strategically leverages celebrity endorsements, sponsorships, and social media to engage and inspire its target audience. Lastly is Nike's brand architecture which encompasses various sub-brands, including Nike, Jordan, and Converse. This diverse portfolio allows the company to cater to different market segments and expand its reach beyond traditional athletic footwear and apparel.
Justification for Choosing Nike
Nike's global prominence, brand strength, and impact on the athletic and fashion industries make it an ideal choice for this critical analysis. The brand's success is rooted in its ability to resonate with consumers, innovate its products, and maintain a strong market presence. Furthermore, Nike's extensive global operations ensure the availability of critical secondary data from sources such as financial reports, industry analyses, and market research, facilitating a comprehensive analysis. By critically examining Nike's branding strategies, equity, positioning, and consumer perception, this analysis aims to provide valuable insights into the brand's success and potential areas for improvement.
Literature Review
The following literature review critically analyses branding theories and concepts as they apply to Nike Inc., a worldwide leader in athletic footwear, apparel, equipment, and accessories. The review explores fundamental branding theories and their relevance to Nike's branding strategies, equity, positioning, and consumer perception. By examining the existing literature, this section aims to provide a comprehensive understanding of the theoretical foundations contributing to Nike's brand success.
Organizational Brand Identity and Image Theory
Brand identity refers to a unique set of associations, values, and attributes that define a brand, while brand image represents how the brand is perceived by buyers (Alvarado-Karste and Guzmán, 2020). The alignment between brand identity and brand image is crucial for brand success. Nike's strong brand identity, characterized by qualities like inspiration, performance, and innovation, has consistently resonated with consumers, resulting in a positive brand image.
Aaker's Brand Equity Theory
Brand equity represents the importance and strength of an organization in the market. Aaker's Brand Equity Model (1991) emphasizes four aspects: brand loyalty, brand awareness, perceived quality, and brand associations (Le-Hoang et al., 2020). Nike's brand equity is evident in its high brand awareness, loyal customer base, perceived quality products, and strong brand associations with top athletes and sports events.
Brand Positioning Theory
Brand positioning entails building a unique and suitable brand perception in the minds of buyers relative to competing organizations (Heinberg et al., 2020). Nike strategically positions itself as a performance-driven and inspirational brand, targeting athletes, sports enthusiasts, and trendsetters. Its emphasis on innovation, superior quality, and authentic connections with athletes differentiates Nike from its competitors.
Brand Architecture Theory
Brand Architecture also plays a significant role in determining the success of an organization in terms of its branding. Brand architecture refers to the hierarchical structure of a brand portfolio. Nike employs a diverse brand architecture with sub-brands like Nike, Jordan, and Convers. This approach allows Nike to cater to various consumer segments while leveraging the strength and reputation of its core brand (Bethune, 2022).
Emotional Branding Theory
Emotional branding creates emotional connections with consumers through storytelling, brand experiences, and shared values (Mossler Fardig and Fisal, 2020). Nike excels in emotional branding by crafting compelling narratives around athletes' stories and inspiring consumers to push their limits and achieve greatness.
Brand Extension Theory
The brand extension involves leveraging the equity of an established brand to launch new products or enter new markets. Nike has successfully extended its brand into lifestyle and fashion categories while staying true to its athletic roots. Examples include collaborations with fashion designers and expanding its Jordan brand into casual and streetwear markets (Yan et al., 2022).
Sustainable Branding Theory
With increasing consumer awareness and concerns about sustainability, brands need to adopt sustainable practices and communicate their commitment effectively. Nike has faced criticisms regarding its supply chain practices in the past but has tried to address sustainability concerns and improve transparency, demonstrating a commitment to sustainable branding.
Brand Personality Theory
Adding to the list of branding theories associated with Nike is brand personality. The theory suggests that brands can possess human-like traits and characteristics, which can influence consumer perceptions and preferences. Nike, for example, is often associated with qualities such as confidence, determination, and authenticity, creating a strong brand personality that resonates with its target audience (Аhbo and Тyjib, 2021). Another branding theory that can be used to measure the success of an organization is the brand’s community.
Brand Community Theory
Brand community theory emphasizes the importance of creating a sense of community and belonging among consumers with a common interest or attraction for a brand. Nike has successfully developed and maintained a brand community by engaging athletes, sports enthusiasts, and consumers who identify with the brand's values and aspirations.
Co-creation and Customer Engagement Theory
Next is the concept of co-creation and customer engagement. Co-creation theory emphasizes the collaborative nature of brand building, where consumers actively participate in shaping and co-creating the brand experience (Iglesias et al., 2020). Nike has embraced customer engagement through initiatives like NikeID, allowing consumers to customize and personalize their products, thus creating a sense of...