Business Facts

• The Swoosh was originally referred to as "the stripe."

Business Facts #8 - Nike

Michael Jordan makes more money from Nike each year than all of the Nike factory workers in Malaysia combined

Celebrity Endorsement

Celebrity Endorsement

How much to Nespresso pay Oscar winning actor George Clooney to advertise their products? Is he worth it? When it comes to advertising and the impact of promotional campaigns, how effective really is the Celebrity Endorsement? It is not a new phenomenon… Red Rock Cola paid Babe Ruth to endorse their drinks way back in the 1930s.

We have seen Gillette, for example, do well for a while having 3 superb sports people: Roger Federer, Thierry Henry and the incomparable Tiger Woods. However in the space of a few months the brand was tarnished with Henry being accused of deliberate hand ball which knocked out Ireland from the World Cup playoffs, and then we had the incredible downfall of Tiger, which was self-inflicted.

Over the years Pepsi have looked to the youth market and spent millions on celebrities such as Michael Jackson but yet could never still quite oust Coca Cola from being the number one soft drink.

Firms who wish to use celebrities need to have deep pockets and large budgets. Celebrities do not come cheap. However they do give you global reach and tap into their loyal fanbase who may well buy a product the celebrity endorses as they want to be like them. As highlighted in the Tiger Woods scenario, the celebrity must match the ideals and values of the brand, and if something goes wrong then the brand will be tarnished by association.

Even a fictional celebrity like James Bond is at it. The idea of product placement isn’t new, especially in the 007 movies, but in recent years it may have gotten out of control with his watch even being mentioned as Omega in Casino Royale, and now in Skyfall, Bond drinks the rather boorish Heineken rather than his celebrated vodka martini.

One of the most successful ever endorsements involved Nike and Michael Jordan, of the Chicago Bulls Basketball team. When Jordan came out of college, Nike offered him a $500,000 deal and his own product line of basketball shoes. His Jordan shoes have now become so successful they are a subsidiary of Nike and have grossed over $1 billion in sales. 75% of all basketball shoes sold in the USA are Nike Jordans!

So whether the celebrities do offer value in the long term, it can be a bit of hit and miss. However, many massive brands do it, so the logic is that it must work!

Company Profiles - Nike

Who are Nike?

Nike is an International Corporation

They make a whole load of sportswear and trainers.

Although they are an American based company, most of their goods are made in sweatshops in developing countries.

Where are the Sweatshops Located?

Most of Nike’s sweatshops are located in the following countries;

South Korea

Vietnam

Taiwan

China

Indonesia

Sweatshops

Within China and Vietnam, the workers in the sweatshops are forbidden from forming independent trade unions.

This helps Nike out as it means there are no groups or organisations fighting for better rights on behalf of the workers.

The Reason For Sweatshops

These sweatshops save Nike a lot of money due to the very lenient labour laws in the chosen countries.

Due to these laws, Nike were able to force 8 year old kids to work a nine hour shift making trainers and goods for the European market.

Nike are currently working alongside the governments of these countries to make labour laws stricter.

By Craig