July 27, 1998
South Florida becomes a key for Nike's plans
Alexis Muellner
Call it Swoosh over Miami.
Nike, the multi-billion dollar athletic shoe and apparel maker, based in Oregon, is spending more money then ever in South Florida.
The company is now forking out more than $400,000 a year here mostly on community oriented, cause-related marketing, said Eddie Brown, regional sports marketing manager for Nike in Atlanta.
That's six times what Nike spent here just four years ago, said Brown.
He was in South Florida last weekend for Zo's Summer Groove II, the charity event organized by Miami Heat star Alonzo Mourning. Nike was a sponsor, and donated to help refurbish several basketball courts and playgrounds in Miami and Fort Lauderdale.
Nike's increased presence in South Florida raises issues about so-called "cause marketing," by outside as well as locally based companies. Mergers and departures have changed the climate for corporate giving in South Florida.
A question of local giving
"Without a doubt, there are a lot more companies trying to market with cause-related endeavors," said Scot Marken, executive director of Hands On Miami, which matches corporations with volunteer organizations. He believes that a loss of big companies in South Florida has put a strain on big corporations being tapped out by social service causes.
Carnival Corp. donates money to more than 100 organizations compared to just 40 two years ago, said spokeswoman Jennifer de la Cruz. There's been a shift for Carnival, she said in giving to more non-arts related causes, including the Zoological Society and the Children's Museum. Carnival also sponsored the Zo's Groove event.
Contributions by outsiders including Nike and Ballpark Hot Dogs, which last month chose Miami and four other U.S. cities to refurbish inner city ball fields, may sound an alarm that could help leverage more giving by South Florida-based businesses, said Marken. "We need to find a way of motivating small companies to realize they can still make a difference if they are giving."
Societal contributions
Studies support the notion that a consumer feels better about a brand it believes is contributing to society, said David Nixon, CEO of the Miami Beach marketing firm Zynyx.
"But Nike recognizes that there's an opportunity to create an American halo effect for all the visitors here," said Nixon. "If travelers from the Americas come to Miami, see the Nike logo everywhere, like many things American, it takes on a premium," Nixon said.
Still, the company walks a fine line between exploiting an impressionable market, and actually improving the lives of people.
"If something is done purely for publicity , people see through it and it has to come from a motivation to work for the betterment of the community -- and if it ties in with the corporate mission, that's a huge plus," said Nixon.
Nike's Brown said he can't deny there's a bottom-line measure of Nike's spending in the community.
"That's our consumers voting at the retail level," he said. Still, his company isn't spending money and leaving, he said, pointing to donations it made to the city of Miami parks and recreation department, and to helping furnish baseball uniforms and drum up and train volunteer coaches.
Nike's effort, said Brown, is part a company-wide increase in cause-related marketing, especially in its most important markets, including South Florida. Brown said Nike has recognized Miami-Dade's school system as the fourth biggest in the nation.
Brand loyalty among children
"We're going to do the right thing by kids, and when you talk about different segments of the population and the degrees of loyalty, kids have tremendous brand loyalty," he said.
A Niketown store is slated to open in December in South Miami at the Shoppes at Sunset development. Brown said the company will soon employ between 150 and 200 in South Florida.
A percentage of sales in the first few days always goes to select local charities, said Robert Mitchell, Nike senior manager for corporate communciations in New York.
Nike said it is also committed to social spending in Latin America, said Henry Molina, vice president of PR for the Americas for Nike. Next year, the company begins an expansion of its youth sports programs to Mexico, Argentina, Brazil & Chile.
Once that progam, as yet unbudgeted, begins, Nike will further examine the Miami market, said Molina, and it is already establishing certain programs. It plans to take the University of Miami mens basketball team to Uruguay and Argentina this fall, for example.
Is all this goodwill making up for negative news reports about Nike's poor labor conditions in Asia?
"Nike has been committed to many organizations long before the press started commenting on labor issues," Mitchell said. "Some of it, believe it or not, is plain old altruism."
© 1998, South Florida Business Journal -- Miami-Dade Edition
