NIKE'S EUROPEN SALES
In millions of U.S. dollars
'85 - 108
'86 - 166
'87 - 191
'88 - 233
'89 - 241
WEITERSTADT, West Germany - In a large room filled with Nike sweat pants and shirts - some manufactured in Europe only for the European market - Kelley Stoutt, advertising manager for Nike Europe, flips on a European version of Nike's now-famous Bo Jackson/Bo Diddley commercial.
The American version shows well-known athletes telling the audience that ``Bo knows'' their sport. The spot ends with a joke on Jackson, as Bo Diddley, the 50's rock 'n' roller, protests that Jackson doesn't ``know diddley'' about guitar playing.
But for European audiences, Nike has slid in a testimonial by Ian Rush, a well-known English soccer player, who says, ``Bo knows real football, too.'' When the commercial is shown in England, it also will include a cricket player who proclaims that Bo knows cricket. Like all of Nike's athletic-shoe advertising, the spots are made by Wieden & Kennedy of Portland.
In West Germany, the United Kingdom and Scandinavia, the commercial will be shown on television in English. Stoutt says Nike's target consumers, 15- to 25-year-old males, have studied enough English to follow the commercials. In France, it will be shown in movie theaters in English because French law prohibits foreign-language commercials from running on television.
Though EC92 already has made her job somewhat easier - for instance, there are now pan-European television stations - Stoutt said, ``You can't delude yourself into thinking the European market is all the same.
``The '92 thing is a big deal,'' Stoutt said. ``It's a way of standardizing business. But advertising deals with motivation, and that can still vary from one place to another.''
Political changes in Eastern European countries also may provide new markets for Nike. ``We're looking at Hungary as a market,''
said David Kottkamp, Nike's general manager for Europe. ``And East Germany could pick up speed in a hurry....People here already are talking about `the second economic miracle' that could come if there's reunification (of East and West Germany),'' said Kottkamp. ``We'll go where the markets are.'' Nike does not now sell in Eastern Europe.
Even without scoring big in the soccer market - the only place it has a top share in the soccer-shoe market is England - Nike has done well in Europe. John Horan, publisher of Sporting Goods Intelligence, an industry newsletter, said Nike should do even better in the future.
``The American footwear business is driving the international market,'' Horan said. Footwear trends and new products start in the U.S., he said, and because Nike has 26 percent of the U.S. athletic footwear business, ``it could be said that Nike is the U.S. market.''
He added that Adidas has tarnished its image in recent years by straying into fashion-oriented merchandise, creating opportunities for Nike, which works hard to portray itself as the maker of performance-oriented shoes.
France is Nike's best market in terms of European profits, and Kottkamp said there ``is great momentum in Germany and the U.K.'' Sweden and Norway also are strong markets. Nike sells throughout virtually all of Western Europe and parts of the Middle East through a network of independent and Nike-owned distributors.
Kottkamp says that Nike's European strategy so far has been to use the advertising and marketing themes that have been successful in the U.S. Sometimes, as in the Bo Diddley/Bo Jackson spot, that means tweaking the spots for Europe. Other ads, such as print ads showing tennis star Andre Agassi aggressively smashing tennis balls while wearing Nike tennis apparel, can be used in Europe with virtually no changes.
``In any language, these ads state about as clearly as you can that this is not country-club tennis,'' Kottkamp said. ``That's a young, irreverent image we're after in all our advertising.''
Nike recently started sponsoring a professional German soccer team, and also sponsors two French teams. The company also probably will build brand recognition when it stages promotional events at the 1992 Summer Olympics in Barcelona, Spain.
Kottkamp said Nike's goal is to be the ``sport and fitness company of Europe, the way we are in the U.S.'' One thing that would help, he said, is if Europeans became as fitness-minded as Americans: ``There is currently not a fitness revolution in Europe anywhere like what there is in the U.S., though I think it could happen in the future.''
As for Europe's market-unification process, which is scheduled to be completed by the end of 1992 and is known as EC92, Kottkamp hopes it will mean a harmonization of the value-added taxes that the different nations place on goods and services. For shoes, those taxes now range from 14 percent to 22 percent. He also hopes it will be the end of footwear import quotas in France and Italy. Debates over footwear quotas are going on now in the European Economic Commission. In theory, EC92 is an attempt get rid of such trade barriers.
What he is more sure about is that EC92 will mean easier transportation of Nike products across borders, increased spending power as the continent becomes more competitive and an increased willingness by Europeans to move for their careers - a plus for employers such as Nike.
In the meantime, Kottkamp is concentrating on understanding the market. Though basketball is popular in Spain and Italy, for instance, badminton is an important sport in Scandinavia. And he is trying to build what he calls ``a foundation for the long haul.''
``We became an American fad a few years ago in some countries. But the problem was, we had no foundation,'' Kottkamp said. ``But I think we can live up to our potential here. Just in the last year we've added three, new Nike-owned distributors. We're getting there.''