P.S. You Should Read This

The “swoosh” logo is unmistakable. It has permeated practically every possible region in the world, and you’d be hard-pressed to find anyone who couldn’t identify its association to Nike. So what has it built its brand image upon? Good, quality shoes. Sure they produce and sell all sorts of sportswear, but their core competency remains in footwear. As a result, any changes made to their offerings are likely to generate a lot of media attention and get scrutinized by the public.

One of their newest products did just that. With the Beijing Olympics right around the corner, Nike is actively unveiling new footwear for all the sports featured. While most of its new products were in line with its traditional image, Nike’s venture into a new sport, riding, raised more than a few eyebrows. Its equestrian boot (Ippeas) is apparently more comfortable than the regular leather boots thanks to its “air zoom” cushioning and a new type of spur, among other tweaks. There are many criticisms of the product, ranging from it “looking like a stripper’s boot” to fears that it is diluting the traditional, elite image of the sport. I’m sure that there are plenty who believe that this is yet another attempt by Nike to diversify its business, but I disagree. Nike has already been burned in the past by trying to go after niche markets, such as cycling shoes, and I highly doubt that it hasn’t learnt from those mistakes. I think that it isn’t using the Olympics as a stepping stone to get into the riding market, which is way too small, but rather, is using it as a marketing ploy. The boot has already gotten more than its fair share of press, and the Olympics haven’t even started yet. Nike’s competition, such as Adidas, have been unable to come up with such equestrian boots, further casting Nike in the limelight.

This is far more effective way for a company to market itself, rather than using traditional television ads and billboards. For starters, the uniqueness of the product means that more people will pay attention to the company and retain interest in it. Secondly, Nike doesn’t even have to pay for the coverage! Media companies, such as Business Week here, automatically end up covering the offering and spreading it among the public. There is one drawback from using unique goods to market a company: brand dilution. A possibility remains that developing products which are completely different from the company’s traditional focus could lead to a “watering down” of a brand, with customers becoming confused over what the company specializes in. Nike has taken this into account with the Ippeas. As I mentioned earlier, Nike is known for its footwear, and the Ippeas in all its uniqueness remains one.

Only time will tell whether Nike’s move actually pays off, and even then, it would be hard to quantify the increase in Nike’s brand equity. Either way, Nike has not taken on too much risk with the Ippeas, but could be faced with plenty of upside from it. That sounds like a good deal to me.

This entry was posted on Thursday, August 7th, 2008 at 10:43 am and is filed under Branding, Innovation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.