Marketing Essentials Do Organisations Need Marketing Marketing Essay

Published Date: 23 Mar 2015

What is marketing. Is it just the advertising of a product/service to potential customers with the use of TV commercials, leaflets, flyers and sales calls or is it more? Is advertising just the beginning of a successful marketing strategy?

There are several different definitions of marketing from a variety of different sources, each one with its own take on marketing. Over the years marketing has become less of function and more as a set of values and a process the majority of organisations have to implement.

Management expert Peter Drucker claims that 'the aim of marketing is to make selling unnecessary, selling and advertising are only part of a larger marketing mix' (cited in Kotler & Armstrong 2011, page 29).

Drucker suggests that for successful marketing strategy the use of the marketing mix is the best most productive and efficient form of marketing.

The marketing mix is the process a business uses to market and sell its product. It is often referred to as the 'Four P's' as it consists of the most important elements of marketing:

1. Who is the product aimed at?

2. What benefit will customers expect from it?

3. What will be its advantage over competitor products? Or its unique selling point?

4. How does the business plan to Position the product within the market?

Another definition of marketing from marketing guru Peter Kotler explains that 'Marketing is a social and managerial process by which individuals and organisations obtain what they need and want through creating and exchanging value with others'. (2003, Cited in Jim Blythe 2009). They believe that marketing is based on the concept of value, the relationship between what has been paid for and what the consumer has received which can be altered by the marketing activities an organisation implements.

(Jim Blythe, 2009) argues Kotlers definition claiming that 'The problem with Kotler's definition is that it tries to include all human exchange processes and does not differentiate between the buyer and the seller therefore making it a very broad definition and not much use in deciding what is marketing and what is not'.

Another aspect of Kotlers definition is that of a basic under lying factor of marketing the consumers 'Needs'. Human Needs are states of felt deprivation such as basic physical needs such as food, warmth and safety along with both social and individual needs. Wants however are the humans' needs when shaped by the person's individuality, culture and society. These wants become Demands. 'Given their wants and resources, people demand products with benefits that add up to the most value and satisfaction' (Kotler & Armstrong, 2011).

In many marketing strategies Abraham Maslow's Hierarchy of needs theory is implemented. It is used for understanding human motivation, management training, and personal development.

Figure 1.2

Maslow suggested that human behavior and decision-making are motivated by one of the five need levels in his hierarchy. If applied to marketing strategy, the ability to effectively appeal to one of these motivational drivers is a key determinant of your potential success

The Chartered Institute of Marketing (CIM) Define marketing as:

'Marketing is the management process for identifying, anticipating and satisfying customer requirements profitably'. (Cited in Jim Blythe, 2009).

Their definition not only looks at identifying customer needs, but also meeting and satisfying them (Short-term) along with anticipating them for the future (Long-term retention). It also outlines the importance of the process of marketing with both aims/objectives and outcomes.

Another way marketing strategies are formed is by taking into consideration the 'marketing management orientations'. There are 5 different marketing concepts in total, focusing on techniques to produce, create and market products/services/companies to potential customers. The 5 marketing concepts include marketing, production, product, selling and societal marketing.

Kotler & Armstrong (2008) - Figure 1.3

After reading a wide range of marketing theory my view on marketing is that 'Marketing is the process of creating customer interest in a product/service by communicating and delivering a business's products/service/company by identifying the target markets needs and meeting them at a profit'.

As we can see the key objective of marketing is to develop successful profitable relationships between the business and the consumer, therefore marketing is crucial to the majority of organisations.

A successful and well planned marketing strategy is essential for both profit and non-profit based organisations. Within profit organisations marketing is responsible for bringing revenue that the company needs to be able to stay in business and with this revenue ideally profit for the company. For non-profit organisations marketing is vital for attracting customers, needed to support the organisations purpose, for example, raising funds and supporting the organisations causes or charities. Without a strong marketing strategy no organisation is likely to survive.

Marketing is the area of the business that is used to interact with potential consumers. It is the companies' way of sending out their message on what the organisation is about determined by their interaction with marketers. Based on the advertising message the organisation may be perceived as creative and influential.

An extensive and successful marketing concept has a wide range of benefits on society, such as being able to satisfy customer needs by developing products/services that result in a better quality of life. Also by creating a competitive environment with other companies providing the same or similar products it lowers a products price, therefore increasing the demand of the product. By increasing the demand for the product it also helps to create employment opportunities as companies need to expand their workforce to help meet demand needs. Along with being able to develop a product distribution system this will allow products to be accessed by a large number of customers and many geographic regions.

The conclusive aim of marketing is the exchange of products/services to customers in such a manner that it increases the satisfaction of the customer's needs. The marketing functions begin with identifying the target markets needs and ends with the consumer's needs being met.

The four main functions of marketing are to create a public identity or image of the company such as logo, slogans or the customer service style. This will be the image that customers will think of when thinking of the company, over time just the logo alone can categorise a successful or unsuccessful company.

The second function is to be able to monitor market trends. By continuously monitoring consumer buying habits along with market research campaigns an organisation can improve the products/services on offer to the public.

Also when opening a new company or creating a marketing strategy a company needs to make sure it will attract the target market with the most potential. Taking time on this will increase the effectiveness of the strategy and keep marketing costs to a minimum.

Being able to form, maintain and build upon customer relationships is also another crucial key function of marketing, as they are the most effective way of communicating to the target markets. By delivering the organisations key messages along with keeping customers up to date with the organisations progress and on the products /services that are soon to be launched will help keep the communication with the customers, helping to maintain the consumer - organisation relationship.

A great example of a company that has perfected the role and functions of marketing to fit their brand and satisfy their target market is Nike. (See Appendix 1 & 2 - Pg. 7-13).

'Within every organisation are stakeholders, they are a person, group or organisation that has a concern or interest in a specific organisation. Stakeholders can affect or be affected by the organization's actions, objectives and policies. Some examples of key stakeholders are creditors, directors, employees, government (and its agencies), owners (shareholders), suppliers, unions, and the community from which the business draws its resources'. (DictionaryBusiness)

In todays' business environment engaging with stakeholders is becoming increasingly vital. For my example on a marketing case study I have used the world wide know organisation NIKE.

Their stakeholders do not just include the athletes and consumers but all groups effected by or have effect on their business operations. The core stakeholders for NIKE are their employees, shareholders, athletes, suppliers along the with the community and consumers. Also indirect stakeholders are the government and non-government organisations.

For their stakeholder analysis regarding their marketing strategy they concentrate on the following questions, which consumers exhibit a need for Nike's products? And are we reaching all potential customers? They split their consumers into target markets.

Athletes of all ages, especially 8-40 years of age, they are then segmented by lifestyle and sport and their primary markets are - Experiences, Makers, Strivers and Believers.

The 1st target market is the young and impulsive persons that spend a lot of time on sports and exercise. Nike market to this stakeholder by marketing to the athlete, they use their well know slogan 'Just do it'. The 2nd target market is the makers these people are a lot like the experiencers but with a lot less resources. They are practical constructive people that enjoy physical recreation and are interested in the quality and the functional purpose of NIKE products. They market their brand by relating this segment through commercials that depict people trying their hardest to reach their goals. Their 3rd market are the strivers, they are trendy, fun loving and motivated by personal achievement, specifically concerned about the approval of others. NIKE grabs this segment by endorsing their products with professional athletes, giving their brand a placement and name. Finally the last segment are the believers these are the people that are motivated by ideas, their purchases are usually those of predictability, purchasing products that are familiar and established. Therefore they are attracted to NIKEs proven quality, household brand.

NIKE uses a wide range of marketing tools and techniques to attract all their target markets.

They have a strong representation at global sporting events such as adverting as world cup football, the super bowl, and Wimbledon. Also maintaining brand associations with major sporting stars. This is an attractive marketing tool as it gives the brand a big name making it attractive to both potential consumers and shareholders.

Increasing products awareness by using integrated marketing approaches such as TV spots and full page magazine advertising is also the perfect marketing technique as it brings awareness to every possible target market.

NIKE also use a range of marketing strategies and tactics such as AMBUSH marketing - promoting their product/brand at other sports brand sponsored events. Along with GUERRILLA marketing - paying athletes to use their products. Finally they use MASS marketing - Nike products are sold at mass merchandisers such as sports direct and JD sports.

When looking at Nike as an example they began creating products that the buying public didn't want resulting in a dramatic drop in their sales. They turned to marketing to help resolve their problems forcing them to take a hard look at what they were doing. This resulted in the company realising that focusing primarily on the product was a great way for a brand to start, but this alone wasn't enough they had to learn to do all the things involved in appealing to the consumer, beginning with understanding who the consumer is and what the brand represents. Changing and concentrating on marketing changed NIKE, it took them from a struggling organisation with no real direction and no specific target market into a world renowned brand.

The value of marketing is an essential process in any organisation with billboards, newspaper ads, marketing people, services and products are all becoming day to day normality in today's world. Everything in this day and age is promoted and marketed - marketing has become a science of its own. It has become such a great influence on a company's success that no longer is any organisation or business accepted without it. With the correct marketing strategy for the specific target market organisations are able to reach their customers fulfilling their needs at the right time and at a profit.

Appendix 1 - Nike case study

http://www.articledashboard.com/Article/Nike-s-marketing-strategy/1456078

Nike's marketing strategy rested entirely upon a brand image which is favourable and has evolved into a great multinational enterprise over time. The favourable brand image has been kept afloat due to the strong association with the Nike's logo which is quite distinctive and the slogan "Just Do It" which has been used in advertisement for quite some time. The company has been known to invest heavily in advertisements and brand promotion (Fill C, 2005 p.54).

Market Segmentation

Most of the consumers of Nike's products are mainly sportsmen. This is so because of the utility that comes with the products. An athlete is more likely to go a sports shoe designed and marketed by Nike more than a person who detests sporting and exercises. Nike targets these consumers by agreements between Nike and athletic teams, college's athletic teams1 etc. for product sponsorship and eventual promotion to the members of these teams. In this way, Nike is able to reach a wide number of consumers and consumers who are more likely to buy. Even though others are likely to buy the products, Nike pays specific emphatic targeting to the athlete more than any group of individuals even though it also targets the youth who have embraced the hip hop culture (Mercer David, 1996, pg 171).

Targeting strategies

Nike lays a number of strategies to target their immediate consumers; athletes and other sportsmen. The targeting strategies include among others the sponsorship of products by professional athletic teams, celebrity athletes and college athletic teams. This strategy is specifically successful because of its ability to reach a large number of athletes. If the athletic team manager prescribes a specific type of track shoes made by Nike, the trainees have no option other than to buy them. The teams can as well buy the track shoes in bulky and supply them to the team members.

The second strategy that Nike applies is the designing of product destination. It does this by associating success with the product. For example, when a celebrity athlete sponsors a specific brand of athletic shoes, the brand will be associated with success. This psychological effect is reinforced with advertisements that affirm this position.

Finally, Nike targets the consumers who are likely to develop product intimacy; those who care more about the utility and quality of the product than the price. In this way, the pricing is not affected too much in a bid to accommodate a large number of consumers. However, price has also been factored in Nikes marketing strategies as shall be seen later in this paper (Frank, 2004, p.173)

Pricing Strategies

As stated in the foregoing section, Nike targets the consumers who embrace product intimacy and thus care less about the product. This has enables Nike to set relatively higher prices than its competitors. This is a strategy that calls for higher pricing points so as to push the perceived product value. It has been established that consumers who consider a product to be of high quality are likely to pay the high price more often and consistently. Once consumers develop product intimacy, they come to associate their person with the product and will pay whatever price quoted on the product provided it has the Nike logo on it.

Another very important thing to note is the fact that Nike uses the vertical integration pricing strategy in which they take ownership of the participants at channel levels that differ and they also engage in multifarious channel level operations both in a bid to control costs and thus influence pricing function (Goldman S, 2000, pp154)

Distribution Strategies

Distribution strategies embraced by an organization can either give them an edge in market or make them lag behind the winners in the market. The more efficient the product distribution is the more sales and thus more profits. The delivery of the right product and at the right time to the consumer not only effects utility but also leads to high degree of consumer satisfaction and loyalty. Nike distributes its products on level basis. The high priced premium products are given to certain distributors while leaving the low priced to be sold at highly discounted prices at mega retail stores such as Wal-Mart. Whereas Reebok embraced a limited distribution strategy Nike ventured more into a global3 market capitalization (Jeannet J, 2000, pp 44).

Promotional and Communication Strategies

Apart from Nike selling quality products which have lead to a high degree of customer loyalty, the promotional strategies that the company employs are simply superb. Nike has contracted a number of professional and celebrity athletes which have managed to draw a considerable attention to their products. Some of the sportsmen signed by Nike include soccer stars such as Ronaldinho, Ronaldo and Roberto Carlos, Basketballers such as Jermaine O'Neal and Lebron James2, triathlete Lance Armstrong and golf superstar Tiger Woods. This has created a relatively high degree of Nike products' awareness. Besides the signing of celebrity sportsmen to promote their products, Nike has also employed a great deal of advertisements through the mass media. Nike employs a selective- demand advertisement focused on the high priced shoes used for traditional sports (Goldman S, 2000, pp154).

Conclusion

Nike has remained and continues to remain at the top of production and distribution of sports gear and equipment. However, it should be noted that competitive pressure cannot allow Nike to 'sleep at the top'. The recent Reebok- Adidas merger poses a great challenge to devise new marketing strategies to continue leading or recede to oblivion. The following recommendations are suggested in a situation where marketing management is competent. These include:

Increased market share through a new product development, competent pricing strategies, advertisement and other sound promotional activities.

Restructure market dominance by driving away competitors mainly through fierce promotional strategy coupled by pricing function that will make the market quite unattractive for the competitors.

Increased social responsibility to strengthen the image of the company

Diversification of market through factoring the Asians and Black Americans in their product promotion besides doing a research to establish the tastes of these groups.

Venture into new distribution channels especially in international markets

Different pricing strategy so as to open up a new market segments.

All the above show a competent marketing management can hoist organizations top become market leaders and making the market leaders maintain their competitive edge in the market through adherence to marketing ethics, marketing plans and well thought out and formulated marketing strategies.

By: Sarah hopkins

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Appendix 2 - Interview with Nike

High-Performance Marketing: An Interview with Nike's Phil Knight

High-Performance Marketing: An Interview with Nike's Phil Knight

An Interview with Phil Knight by Geraldine E. Willigan

Nike is a champion brand builder. Its advertising slogans-"Bo Knows," "Just Do It," "There Is No Finish Line"-have moved beyond advertising into popular expression. Its athletic footwear and clothing have become a piece of Americana. Its brand name is as well-known around the world as IBM and Coke.

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. 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. All of those problems forced the company into a period of intense self-examination. 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.

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. Blue Ribbon Sports started out distributing running shoes for a Japanese company, then shifted to designing its own shoes and outsourcing them from Asia. Blue Ribbon Sports's performance-oriented product innovations and mastery of low-cost production translated into shoes athletes wanted to wear and could afford. Knight and Bowerman's track connections got the shoes onto the feet of real runners. And then jogging emerged as a new national pastime.

By 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. 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. Sales and profits were doubling every year.

Then in the mid-1980s, Nike lost its footing, and the company was forced to make a subtle but important shift. 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. Since then, Nike has resumed its domination of the athletic shoe industry. It commands 29% of the market, and sales for fiscal 1991 topped $3 billion.

Here Phil Knight explains how Nike discovered the importance of marketing and what difference that discovery has made. This interview was conducted at Nike, Inc.'s Beaverton, Oregon offices by HBR associate editor Geraldine E. Willigan.

HBR: Nike transformed the athletic shoe industry with technological innovations, but today many people know the company by its flashy ads and sports celebrities. Is Nike a technology company or a marketing company?

Phil Knight: I'd answer that question very differently today than I would have ten years ago. For years, we thought of ourselves as a production-oriented company, meaning we put all our emphasis on designing and manufacturing the product. But now we understand that the most important thing we do is market the product. We've come around to saying that Nike is a marketing-oriented company, and the product is our most important marketing tool. What I mean is that marketing knits the whole organization together. The design elements and functional characteristics of the product itself are just part of the overall marketing process.

We used to think that everything started in the lab. Now we realize that everything spins off the consumer. And while technology is still important, the consumer has to lead innovation. We have to innovate for a specific reason, and that reason comes from the market. Otherwise, we'll end up making museum pieces.

What made you think the product was everything?

Our success. In the early days, anybody with a glue pot and a pair of scissors could get into the shoe business, so the way to stay ahead was through product innovation. We happened to be great at it. Bill Bowerman, my former track coach at the University of Oregon and cofounder of the company that became Nike, had always customized off-the-shelf shoes for his runners. Over the years, he and some other employees came up with lots of great ideas that we incorporated. One of Bowerman's more legendary innovations is the Waffle outsole, which he discovered by pouring rubber into a waffle iron. The Waffle Trainer later became the best-selling training shoe in the United States.

We were also good at keeping our manufacturing costs down. The big, established players like Puma and Adidas were still manufacturing in high-wage European countries. But we knew that wages were lower in Asia, and we knew how to get around in that environment, so we funneled all our most promising managers there to supervise production.

Didn't you do any marketing?

Not formally. We just tried to get our shoes on the feet of runners. And we were able to get a lot of great ones under contract-people like Steve Prefontaine and Alberto Salazar-because we spent a lot of time at track events and had relationships with the runners, but mostly because we were doing interesting things with our shoes. Naturally, we thought the world stopped and started in the lab and everything revolved around the product.

When did your thinking change?

When the formulas that got Nike up to $1 billion in sales-being good at innovation and production and being able to sign great athletes-stopped working and we faced a series of problems. For one thing, Reebok came out of nowhere to dominate the aerobics market, which we completely miscalculated. We made an aerobics shoe that was functionally superior to Reebok's, but we missed the styling. Reebok's shoe was sleek and attractive, while ours was sturdy and clunky. We also decided against using garment leather, as Reebok had done, because it wasn't durable. By the time we developed a leather that was both strong and soft, Reebok had established a brand, won a huge chunk of sales, and gained the momentum to go right by us.

We were also having management problems at that time because we really hadn't adjusted to being a big company. And on top of that, we made a disastrous move into casual shoes.

What was the problem with casual shoes?

Practically the same as what happened in aerobics, and at about the same time. We went into casual shoes in the early 1980s when we saw that the running shoe business, which was about one-third of our revenues at the time, was slowing down. We knew that a lot of people were buying our shoes and wearing them to the grocery store and for walking to and from work. Since we happened to be good at shoes, we thought we could be successful with casual shoes. But we got our brains beat out. We came out with a functional shoe we thought the world needed, but it was funny looking and the buying public didn't want it.

By the mid-1980s, the financial signals were coming through loud and clear. Nike had been profitable throughout the 1970s. Then all of a sudden in fiscal year 1985, the company was in the red for two quarters. In fiscal 1987, sales dropped by $200 million and profits headed south again. We were forced to fire 280 people that year-our second layoff ever and a very painful one because it wasn't just an adjustment and trimming of fat. We lost some very good people that year.

How did you know that marketing would solve the problems?

We reasoned it out. The problems forced us to take a hard look at what we were doing, what was going wrong, what we were good at, and where we wanted to go. When we did that, we came to see that focusing solely on the product was a great way for a brand to start, but it just wasn't enough. We had to fill in the blanks. We had to learn to do well all the things involved in getting to the consumer, starting with understanding who the consumer is and what the brand represents.

Five years ago, I left my job as Nike's corporate architect to design Nike athletic shoes. The switch was easier than you might think. I learned long ago that a building is not purely functional; it means something to people and evokes an emotional response. It's the same with Nike shoes. A Huarache running shoe or an Air Jordan basketball shoe is not just a combination of price and performance. It has feelings and images associated with it that make people like it better than something else, even when they can't explain why. That gray area, the stuff that no one can really articulate, has to do with the shoe's design.

Inspiration for a design can come from anywhere-from a cartoon, a poster, the environment. But the design process almost always involves the athletes who use our product. Sometimes an athlete tells me what he or she wants in a shoe, but often it's a matter of incorporating the athlete's personality.

Take Bo Jackson. When I was designing the first cross-training shoe for Bo, I watched him play sports, I read about him, I absorbed everything I could about him. Bo reminded me of a cartoon character. Not a goofy one, but a powerful one. His muscles are big, his face is big-he's larger than life. To me, he was like Mighty Mouse. So we designed a shoe called the Air Trainer that embodied characteristics of Bo Jackson and Mighty Mouse. Whenever you see Mighty Mouse, he's moving forward. He's got a slant to him. So the shoe needed to look like it was in motion, it had to be kind of inflated looking and brightly colored, and its features had to be exaggerated. That's how we came up with the larger-than-life, brightly colored Stability Outrigger and the similarly colored, inflated-looking rubber tongue top.

Working with Michael Jordan is a little different. He has his own ideas about how he wants the shoe to look and perform. When we were designing the Air Jordan 7, for instance, he said he wanted a little more support across the forefoot, and he wanted more color. The Air Jordans had been getting more conservative over the years, so what I think he was telling me-without really telling me-is that he wanted to feel a little more youthful and aggressive. Michael has become more mature and contemplative in recent years, but he still plays very exciting basketball, so the shoe had to incorporate those traits as well.

It all came together for me in a poster I had seen advertising an Afro Pop music series on National Public Radio. The imagery in the poster was very exciting and strong and slightly ethnic. I showed Michael the poster, and he thought it elicited the right emotion, so I drew from that. We came up with a shoe that used very rich, sophisticated colors but in a jazzy way.

Sometimes I don't have an athlete to work with. When I was designing our first outdoor cross-training shoe, which was a category we were creating, I didn't have any particular players I could study. So I kept thinking about the outdoors, and that led to Native Americans, who did everything outdoors-from their tribal rituals to their daily chores. What did they wear? Moccasins, which are typically comfortable and pliable. And that led to the idea of a high-tech, high-performance moccasin.

I found a neat old print by Robert Wesley Amick depicting Native Americans in the natural environment, and I painted some high-tech Nike's on their feet so I could visually describe the original inspiration in a humorous but informative scenario. We've built a whole line of shoes around that image. The soles are flexible so you can pad down the trail, the leather is thin and lightweight, the outsole has a low profile, and the colors are earthy.

Stories about how we arrived at particular designs may be entertaining, but the storytelling also helps us explain the shoes to retailers, sales reps, consumers, and other people in the company. You'd be surprised how much information Mighty Mouse, Afro Pop, and a Native American in a Western landscape can convey.

Didn't Nike understand the consumer right from the start?

In the early days, when we were just a running shoe company and almost all our employees were runners, we understood the consumer very well. There is no shoe school, so where do you recruit people for a company that develops and markets running shoes? The running track. It made sense, and it worked. We and the consumer were one and the same.

When we started making shoes for basketball, tennis, and football, we did essentially the same thing we had done in running. We got to know the players at the top of the game and did everything we could to understand what they needed, both from a technological and a design perspective. Our engineers and designers spent a lot of time talking to the athletes about what they needed both functionally and aesthetically.

It was effective-to a point. But we were missing something. Despite great products and great ad campaigns, sales just stayed flat.

Where did your understanding fall short?

We were missing an immense group. We understood our "core consumers," the athletes who were performing at the highest level of the sport. We saw them as being at the top of a pyramid, with weekend jocks in the middle of the pyramid, and everybody else who wore athletic shoes at the bottom. Even though about 60% of our product is bought by people who don't use it for the actual sport, everything we did was aimed at the top. We said, if we get the people at the top, we'll get the others because they'll know that the shoe can perform.

But that was an oversimplification. Sure, it's important to get the top of the pyramid, but you've also got to speak to the people all the way down. Just take something simple like the color of the shoe. We used to say we don't care what the color is. If a top player like Michael Jordan liked some kind of yellow and orange jobbie, that's what we made-even if nobody else really wanted yellow and orange. One of our great racing shoes, the Sock Racer, failed for exactly that reason: we made it bright bumble-bee yellow, and it turned everybody off.

What's different now?

Whether you're talking about the core consumer or the person on the street, the principle is the same: you have to come up with what the consumer wants, and you need a vehicle to understand it. To understand the rest of the pyramid, we do a lot of work at the grass-roots level. We go to amateur sports events and spend time at gyms and tennis courts talking to people.

We make sure that the product is the same functionally whether it's for Michael Jordan or Joe American Public. We don't just say Michael Jordan is going to wear it so therefore Joe American Public is going to wear it. We have people who tell us what colors are going to be in for 1993, for instance, and we incorporate them.

Beyond that, we do some fairly typical kinds of market research, but lots of it-spending time in stores and watching what happens across the counter, getting reports from dealers, doing focus groups, tracking responses to our ads. We just sort of factor all that information into the computer between the ears and come up with conclusions.

Harvard Business Review: http://hbr.org/1992/07/high-performance-marketing-an-interview-with-nikes-phil-knight/ar/1