Summary
The merger of two giants in their respective industries creates a multitude of opportunities for both brands. Some are obvious, while others are a little more obscure.
Apple and Nike have come from different paths to reach the same point. A combination of the two would have seemed to be unlikely at best 10 years ago. The sharing of products in 2006 now appears to be a very smart move for different reasons, depending on which company is given focus.
Nike is in a war right now at retail. Many factors have contributed to the difficulties in the market place. More importantly, only a few actions taken on Nike's part can help keep the brand above the currently fraying athletic footwear market. With the consumer seemingly bored with the more recent technologies introduced in the industry, a turn to the real hotbed of technology provides much needed energy to the brand.
Apple is a company which has once again risen to become the most talked about brand in the computer industry. This time, they have also transcended the world of computers to stand on the same podium with what many consumers over the past 20 years have considered to be the coolest and hippest brand of their generation.
Apple can now dig even deeper into the minds and pockets of the trendy 12-24 year old consumer with its expertise in product development and marketing. Along the way, they are also able to tap into a technology receptive group which hits the road to exercise and relieve the stresses of every day life.
When you add up the two, not even a computer can argue with the logic that 1 plus 1 equals 3.
Analysis
It is rare that two respective industry giants, Apple and Nike (or is it Nike and Apple?) have the desire and the ability to combine forces and commercialize a product that in its initial stage has the appearance of being something special. Individual egos, design disconnects, and brand personalities usually hamper and ultimately derail such grand ideas.
This is a case where the unusual has been successfully executed. In doing so, we have the opportunity to see how each brand actually benefits.
Apple is a brand firing on all cylinders right now. They have introduced a series of wildly successful products in the market in this decade. More important is the fact that they have achieved success through different methods in many cases.
The iMax computer was a quality product seemingly similar to many other quality products in the market, but Apple rose above the rest with the simple yet revolutionary introduction of bright colors into the traditionally drab black and white world of computers.
The MP3 players were in abundance in the market place before the iPod was introduced by Apple. What lacked was a point of differentiation among the many brands. Apple used both barrels to pull off one of the most successful product launches in history. A marketing campaign using of all things, the opposite approach they had used with the iMax by using black images with only the iPod product in white, hit the top of the coolness scale with the trendy and money to burn 12-24 year old age group. They then followed it up with a technological success in the introduction of the tiny Nano version.
Now they are on stage with Nike, and they have much to gain with this union. Nike is a brand that hits across a broad demographic group. It is a brand which appeals to the young and the restless as well as the gamut of athletes from the professional level down to the weekend warrior. Nike has the rare ability to transcend color, income, and just as likely to be seen in Hollywood as well as Wimbledon.
The association with Nike helps to open up doors to a new consumer base. It is not just running shoes and a gadget that brings information and music to the runner. It is a union of two brands in which Apple now is able to tap into the diverse market of the Nike consumer. Apple gains by association alone. They also gain from the marketing savvy of Nike in a product arena that is different than what they are used to playing in as a brand.
Prior to the introduction of the iPod, Apple was a brand which was narrower in appeal. It was sought after by the creative community for its more precise, colorful, and user friendly graphics programs. For the consumer who was into computers, Apple was cool. For those not into computers, Apple was just another computer company.
So the biggest advantage to Apple is that they are now thought of by more consumers and in more product channels due their association with Nike.
On the other hand, Nike is in a market environment in which they are a strong player in a very week league. They are dominating the athletic footwear landscape, but are failing on the fashion side of the business. More importantly, their image of being the most successful technology brand in the athletic industry has been tarnished recently by only moderately successful product introductions featuring advances in their all important air platforms.
Apple is a technology wizard in the eyes of the consumer. They are up near the top when it comes to design and creativity. While athletic footwear has cooled off in the world of hot fashion, the association with the products that are emerging from Apple and which appeal directly to the consumer base Nike has owned in the past provides a boost for them to this customer.Nike gains tremendously by being able to go outside of what have been the traditional parameters of footwear technology, and this has the potential to create a new dynamic in the athletic industry.
Nike also gains with a fresh outlook on how to market to the trendy young consumer. This is an area in which they have been very successful in the past, but the success has been athlete and endorsement driven in more recent years and not as driven by creative concept. Apple is 100% on target in its execution of the creative for marketing its products. Even though one of the strengths at Nike has always been its marketing abilities, they can learn from Apple and broaden the strength of their creative output in this all important brand imaging function.
In the end, what appears to be an unusual union provides benefits to two very strong brands. The failure of the competition in their respective industries will only lead to a bigger gap between the leaders and the followers. The synergies will come more from market and marketing implications than anywhere else. Regardless of the origin, the result is the creation of a sum greater than its parts.
