This interview was conducted at Nike, Inc.’s Beaverton, Oregon offices by HBR associate editor Geraldine E. Here Phil Knight explains how Nike discovered the importance of marketing and what difference that discovery has made. It commands 29 % of the market, and sales for fiscal 1991 topped $3 billion. Since then, Nike has resumed its domination of the athletic shoe industry. Instead of putting the product on center stage, it put the consumer in the spotlight and the brand under a microscope-in short, it learned to be marketing oriented. Then in the mid-1980s, Nike lost its footing, and the company was forced to make a subtle but important shift. Sales and profits were doubling every year. Open wearing Nike shoes, Henry Rono had set four track and field records in Nikes, and members of the Boston Celtics and Los Angeles Lakers basketball teams were wearing them.

And then jogging emerged as a new national pastime.īy 1978, the year Blue Ribbon Sports changed its corporate name to Nike, Jon Anderson had won the Boston Marathon wearing Nike shoes, Jimmy Conners had won Wimbledon and the U.S.

Knight and Bowerman’s track connections got the shoes onto the feet of real runners. Blue Ribbon Sports’s performance-oriented product innovations and mastery of low-cost production translated into shoes athletes wanted to wear and could afford. Blue Ribbon Sports started out distributing running shoes for a Japanese company, then shifted to designing its own shoes and outsourcing them from Asia. Nike’s roots go back to a company called Blue Ribbon Sports, which Knight, a former runner at the University of Oregon, and Bill Bowerman, Knight’s former track coach, created in 1962. Ultimately, says founder, chairman, and CEO Phil Knight, the company realized that the way forward was to expand its focus from the design and manufacture of the product, where Nike had always excelled, to the consumer and the brand. All of those problems forced the company into a period of intense self-examination. After more than a decade of meteoric growth, Nike misjudged the aerobics market, outgrew its own capacity to manage, and made a disastrous move into casual shoes. So it may come as a surprise that Nike, the consummate marketer, came to understand the importance of marketing late in its life: after it hit the $1 billion revenue mark. Its brand name is as well-known around the world as IBM and Coke. Its athletic footwear and clothing have become a piece of Americana. Its advertising slogans-“Bo Knows,” “Just Do It,” “There Is No Finish Line”-have moved beyond advertising into popular expression.

Recruiting Young Love by Mark D. Jordan