January 27, 2010

Nike Reps Visit TCU Business Students

Bill Bowerman, a running coach, taught himself how to make shoes because he wanted a lighter shoe for his athletes.

Phil Knight, a track athlete who had just graduated with his MBA, saw the potential.

In 1964, they each put up $500 and founded what is today the world's leading supplier of athletic shoes and apparel and a major manufacturer of sports equipment, with revenue in excess of $18.6 billion and more than 30,000 employees worldwide. Nike.

Nelson Talks to Students Nelson Farris, director of corporate education and heritage for Nike, came to the Neeley School of Business at TCU on January 25 to talk to TCU MBA students (Dr. Bob Leone’s class), undergrad business students from other classes, and several professors and Neeley staff members. All got a behind-the-scenes look at the beginnings of one of America’s greatest corporations.

A young track athlete himself, Farris opened a small shoe store in Long Beach in 1972 that carried the new and little-known Nike line of running shoes. In 1973, he accepted a job from Blue Ribbon Sports, which would go on to become Nike, as the promotions, direct sales and retail manager for southern California. He has held 20 different jobs during his Nike career, traveling over a million miles while visiting more than 50 countries on six continents.

Farris told the class that one of Bowerman and Knight’s first hires was Jeff Johnson, a former miler, social worker and anthropology grad. Johnson drove to high school track meets and talked with runners and coaches about the races, training, injuries and what runners wanted in a product. Johnson's communication with athletes became the key to Nike's product design and marketing strategy.

“We were never in the sneaker business,” Farris said. “We made shoes for athletes. We were in the athletic shoe business. We connected to customers because we were all running geeks.”

Farris said that Bowerman would experiment with different materials to make his shoes lighter, make running shorts out of parachute material, concoct sports drinks, and experiment with artificial turf.

“He had a commitment and focus to do his best,” said Farris, who was accompanies by Kel Devlin, Nike Golf’s Global Marketing Support Director, and Ellen Foley, HR Director for Nike Golf, Tennis, Extreme Sports and Kids.

Nelson Speaks to Class Farris got some laughs from the students when he related how, staring at a plate of waffles in 1971, Bowerman saw the future of running shoes. Although pouring rubber into his wife’s waffle maker didn’t work, he eventually found a way to make the waffle pattern and the modern running outsole was born.

In the ’60s and ’70s, Farris said, “Nike outhustled, out-listened, out-cared and out-serviced our competitors.” From 1980-90, Nike began making shoes for basketball, baseball and football. “By 1990, 50 percent of the pros were wearing our stuff. We would take them prototypes and ask them, ‘What do you think of this?’ Try it.’ We built relationships with athletes.”

Along the way they learned about marketing. The L.A. Olympics offered a great opportunity for Nike’s first true integrated marketing campaign. They blanketed L.A. with graffiti-like ads featuring Olympic athletes wearing Nike apparel on 30-foot-high murals on the sides of buildings. Even though Nike was not an official sponsor, everyone thought they were. The campaign was a huge success.

Farris said that the only time that Nike didn’t see the future was when Jazzercise became popular. Reebok jumped on it and Nike suffered. But the company bounced back to be the dominant number one, epitomizing the “internal character of the place that Bowerman and Knight instilled,” he said.

Dr. Leone said that he invited the Nike speakers because he wanted to give students an inside look at how Nike started and grew to what it is today, as only someone who was there from the beginning could deliver. “As we heard from Nelson, early on, in the 60s and 70s, Nike was using relationship marketing principles, teams, and rotational programs so employees could understand all aspects of the business, and this was not widely done by companies at that time.”