Nike Takes Its Case to the Streets

It’s 10:30 a.m. on what’s shaping up to be another sweltering Saturday in the hills above Los Angeles. A camera crew is piling into an SUV as board rider John Gwiazdowski starts another run down the maze of residential streets that empties onto the flatlands below.

With any luck, Gwiazdowski, who is lying on his back on an elongated skateboard, will slalom through traffic at nearly 30 mph and finish his last run before an irate motorist summons the police. If Nike Inc. is lucky, the camera crew will capture enough adrenaline-rush footage to top off another edgy marketing video for distribution among Los Angeles teens.

Gwiazdowski’s wild ride this summer was part of a new Nike marketing program targeting young Southern Californians who have the power to shape shoe and apparel trends nationwide. Unlike glitzy television commercials featuring a Swooshed-out Tiger Woods, however, Gwiazdowski wasn’t wearing a single Nike product.

Nike is, in effect, selling itself to younger consumers, particularly those in extreme sports, a market that Nike has failed to crack. Nike hopes the videos--dubbed JDIs, which is short for Just Do It--and a handful of other local marketing initiatives will build credibility for the Swoosh among media-savvy teens under assault by a wave of competing brands.

“The challenge Nike faces is keeping its brand fresh to kids in a way that doesn’t seem phony, artificial and manufactured,” said Kevin Lane Keller, a marketing professor at Dartmouth College. “With kids, it’s all about credibility.”

The local marketing effort is designed to augment corporate advertising and marketing efforts that totaled $591.2 million in 1999, according to Competitive Media Reporting. Nike prides itself on producing irreverent ads featuring such well-known athletes as Woods, cyclist Lance Armstrong and Olympian Marion Jones.

But Nike also has stumbled in recent years when it comes to reaching younger consumers. The company got a black eye in the mid-1990s when it tried to use its considerable advertising might to bull its way into the extreme sports market. The ad campaign sparked some controversy, but most extreme athletes stuck doggedly with smaller brands deemed to be more credible.

Some marketers point to Nike’s size and largely successful heritage as part of its problem.

“At some point a company becomes part of the establishment,” said Ed Rice, a San Francisco-based executive director of Landor Associates, a brand and corporate image consulting firm. “And you might not be seen as hip or cool to a younger, very important group of emerging consumers.”

Nike has faced an uphill ride in snowboarding. With $8.99 billion in worldwide revenue, the shoe and apparel company dwarfs the entire snowboard industry. But Nike never fulfilled its plan to market a Nike snowboard line. Earlier this month, it also said it would stop marketing snowboard boots.

But Nike plans to continue marketing its All Conditions Gear apparel to snowboarders. In September, Nike filled the Great Western Forum with 40 tons of snow, dozens of top riders and rapper Eminem for a daylong party. Nike also agreed to outfit 1,200 snowboard instructors and ski area personnel at Intrawest Corp. resorts, including Mammoth Mountain. Some marketers say the Intrawest deal could backfire if board riders turn up their noses at gear worn by resort employees.

Big companies often find that broad corporate goals are in conflict with an increasingly splintered market. Nike Chairman Philip H. Knight has acknowledged that “we need to expand our connection to new categories and toward new consumers.”

That means developing “a real understanding that kids in the Valley have wants that are different from the South Bay and Beverly Hills,” said David Carter, a Los Angeles-based sports marketing consultant.

In addition to polishing Nike’s image in Southern California, the local marketing team hopes to uncover trends breaking in a sports-rich environment that incorporates basketball and baseball as well as in-line skating, motocross, snowboarding and Jet Ski riding.

Henry Chan, the 28-year-old Nike marketing executive in charge of the local program, compares the challenge with what he experienced while working in countries where such Nike-dominated sports as basketball and track aren’t so prominent. “In Los Angeles, there’s such a huge and diverse [sports] market to try to get your arms around,” Chan said.

Nike’s previous attempts at local marketing have largely been mirror images of national initiatives.

“It’s all about connecting the corporate household brand name with the right kids on the street,” said Michael Nixon, founder of N5, an Inglewood marketing company that develops street-level tactics for Nike. “We get the company in touch with the right ‘taste-maker’ kids, the kids who make a difference in the street.”

“They’re going after what marketers describe as the influencers,” said Stephen A. Greyser, a Harvard University marketing professor. “And, when you’re a company of Nike’s size, you have the budgets to do these kinds of demographic or geographic targeting aimed at those influencers.”

Chan’s team usually travels in a stretched 1956 Chrysler limousine called the CaliCruiser. The vehicle is decked out with an industrial- strength sound system and state-of-the-art video game consoles. Nike also has outfitted a truck with a portable basketball hoop and a DJ booth.

One evening early last month, the CaliCruiser was parked at Dorsey High School in Los Angeles before the school’s football team hosted Roosevelt High. As fans passed by, Nike’s marketing team handed out copies of the JDI video, along with stickers emblazoned with a stylized Swoosh logo that incorporates the letters “LA.” Nike also is producing a limited amount of gear with the LA logo.

Marketers say Nike is smart to stick with the soft sell. “These kids are smart, and marketers who want to embrace the youth lifestyle have to learn that it’s more about seduction than anything else,” said James Leitz, vice president EventSource, an arm of sports-marketing giant IMG that is helping such companies as Norelco and Mervyn’s California enter the emerging sports arena.

At the core of Nike’s local marketing push is a 12-member teen panel called the CaliCrew. Members were selected after a daylong audition during which 200 candidates sang, danced, rapped or simply told stories about themselves.

“We were looking for leaders in their neighborhoods,” Chan said. “We looked at how they dressed, how they answered questions. We weren’t simply looking for athletes. We were looking at their all-around personalities.”

CaliCrew members meet regularly at Nike’s Marina del Rey office to critique products in Nike’s pipeline. They forward fashion tips, neighborhood news and candidates for inclusion in upcoming videos.

“To be honest, I never owned any Nike shoes until I got to know their styles,” said Brenda Herrera, a 19-year-old Cal State Long Beach student. “When I thought about Nike, I thought about men wearing them--if you play basketball, you wear Nikes.”

Since Nike isn’t directly selling product, Chan’s team measures success by getting the Nike name in the right place at the right time. One victory came in June when Nike rushed 8,000 signs into print for the Los Angeles Lakers’ victory celebration. The placards showcased the phrase “bling-bling,” a street term that players used to describe the team’s NBA championship rings--along with Nike’s distinctive LA Swoosh logo.

“If it connects with the customers, creates buzz, creates relationships, it can be much more effective than spending a lot on traditional advertising,” said David A. Aaker, a marketing professor at UC Berkeley who has written marketing textbooks. “It’s worth the investment, particularly if it helps establish credibility.”