Nike Air Bounds, he's retail at9
Nike Air Maestro. These retail at 10999.
So Nike Air Harachi this is a 1.
And if you have any money left,
Nike can sell you a shoe for even more.
Their highest price shoe is the Air Jordan.
It goes for $130.
This father from Kent just spent nearly
$300.00 on shoes for his family.
He's typical of parents who've
helped make Nike the best
selling brand in the world.
Is it worth it? Yes, it's worth
it for them to have the best. Y.
I'm Spike and these are my Air Raid sneakers.
Nike's high profile and persuasive ad
campaigns have worked the words Just do it.
Have done it for Nike.
Today they are a 3 1/2 billion
dollar international corporatio.
Their growth is enormous,
$100 invested in Nike stock jusn
years ago would be worth $20,000 today.
Owner and founder Phil Knight started the
company in the basement of his parents home,
parlaying a $37 grub stake
into a personal fortune.
Today, Nikes headquarters in the
Portland suburb of Beaverton is
an expansive corporate complex.
When you walk through this campus and
you're looking at what it's become, Nike,
what do you think about,
oh, I think there's a probably %
of the time I think about eithee
problems or the opportunities out ahead.
And there's maybe 1 or 2% of the time
where I'll step back and say ita
long way from my mother's laundry room
to some. Phil Knight is a
modern day Horatio Alger story,
a brilliant entrepreneur who
found a need and filled it.
Critics say Nike epitomizes whas
wrong with American business,
that it exports jobs in order
to fatten the bottom line.
Nike critics also attacked the
company for pushing expensive ss
on inner city kids, some of whom
have turned to crime to get the.
I was downtown one day and and w
these saw a little boy just get
across the street from the bar, Marshall
get totally beat up and his Nikes was
taken Air Jordans. I like the s.
That's what's happening Air Jor.
Today, Nike spends millions
of dollars researching,
designing and marketing at sporting goods.
It is a far cry from the
shoe that started it all.
The Waffle Trainer,
named after the waffle iron Phil Knights
partner used to make the shoes rubber sole.
Knights. Former University of
Oregon track coach Bill Bowerman
came up with the idea.
It was Bowerman who teamed up wh
Knight to start the shoe compan.
We made the deal with a
handshake and $500.00 apiece.
Phil Knight realized that he cod
turn a huge profit by making
his shoes overseas in Asia.
The people in this Asian factory
make just pennies an hour,
a Boston Shoemaker says.
It's this kind of practice that
drove him out of business.
Being labor intensive,
they go to the ends of the earto
find out where the cheapest labs
and and they're now over in Chi,
Bangkok, all over the world.
Not long ago, most of America's shoes
were made in factories on the East Coast.
Allen Shoes in Boston stuck it t
for five decades, but just coult
compete with other shoe manufacturers
who took their production overs.
So this past spring, the last shoe factory
in Boston closed its doors,
leaving many American workers in the lurch.
All told, I've been in the
shoe shop for 45 years,
and so it's and I'm not yet ready to retire.
So it's kind of a let down,
but it's understandable.
They're not hiring any
place from what we hear.
So just have to look all around.
Consumers may wonder how shoes
that are so inexpensive to
manufacture can cost so much.
Phil Knight defense, his profit
margin and a pair of Air Jordans
that are about
$130 in the store. How much mony
of that goes into Nike's pocket?
Well basically the profit on the
Air Jordan is is very similar
to what it is on the rest of our
products in terms of percentage.
You know, we average about 38% s
profit on a pair of shoes and of
that 38% then we have to pay, you know,
the rent and salary and research
and development and advertising.
So the bottom line will come
down somewhere around 12 or 13%.
So $12.00 for every 100 is prof.
That's about right, yes.
Nikes are among the most expense
athletic shoes on the market.
We wanted to find out if you
were getting what you pay for,
so we asked a panel of foot specialists
in Seattle to compare shoes.
Here we have the Air
Jordan 130 and a Nike.
Also a basketball shoe for $50.
Is there a difference in the quy
of these shoes? For the price?
There's not $80.00 worth of difference.
No. You're paying for Michael Jordan.
I mean, you're paying for the n.
There is certainly some technoly
in the Air Jordan whether the
quality of the leather is an is.
I mean, some of the detailing
of the shoe is nicer,
but if you know as far as the
construction of the shoe,
the overall value to you as a consumer, no.
You're
looking at a Nike Hurachi.
It's about $110. Is it worth its
far as the stability shoe, it hs
no heel supports whatsoever, vey
little stability from side to s.
Is it a bad shoe
for most of people that buy it?.
Not all parents are willing or e
to spend top dollar on sports s.
Once they get a base, they can go to work
and buy them they self. Then thy
can have all the shoes they want
and some kids will get a job.
But at minimum wage it could take weeks
to save up for a pair of athletic shoes.
On the flip side, some kids won't wait.
This Baltimore teenager was strangled
in a fight to keep his Air Jord.
And just last week in Saint Lou,
two teens were robbed at gunpoit
for their sports jackets.
Nike and other sports apparel companies
use personalities like Michael Jordan
to influence children and paren.
They buy Michael services becaue
of the image that he has,
the esteem that's attached to h,
and they meld it together with a belief
that says you can be like Micha,
you can be somebody by being th.
Entering in an atmosphere in the child's
own environment with it maybe nothing
else of that he values as much as this.
This stands out alone to him.
And he says, God, I've got to
have those or else I'll die what
you expect. Superstar Michael Jn
helped form our image of Nike,
and with good reason.
The shoe company pays him more o
endorse their shoes than the Cho
Bulls pay him to play basketbal.
Jordan defends this
expensive shoe endorsement.
I think that's a misconception t
the shoe companies are the blam.
We are the blame in terms of
going back in these communities
and reestablishing our values.
By no means should any materialistic thing
value overvalue another person's life.
And I don't think you should.
Point your fingers at a Nike
or Reebok or whoever.
I think you should turn around
and look in the mirror and say e
we doing enough for our communiy
or we can we reestablish those
those those homely values that e
should for our kids to follow?
Nationwide, narcotics officers say they
have seen many kids turn to selling drugs
so they can buy the latest sportswear.
If the kid has
low self esteem and feels
like he needs to do something
to be long
or to be cool. You know, some ks
will go to pretty extreme measu.
Some parents complain that
commercial companies and their
stars are sending out the
wrong messages to our children.
Judy Howard of Seattle won't
buy Nikes for her kids.
She doesn't like the way the
company does business.
Michael Jordan is to scapegoat,
and they use him, pay him. Good for it.
Parents, but we we're the ones e
been paying Michael Jordan Nike
has a massive public relations campaign
to counter its negative publici.
A recent book out about the com,
called Swoosh reveals other secs
of how Nike made it to the top.
The book's co-author, Julie Strasser,
says the original board meetings
weren't what you might expect
from this Fortune 500 company.
I mean, this was the company in8
at a sales meeting where guys gp
and made a pitch for a marijuana pipe.
And yet, 12 years later,
they're doing anti drug commerc.
Despite its criticisms,
Nike is still one of the most desired
places to work in the Northwest.
Their offices are flooded with e
than 15,000 applications a year.
Nike's campus houses daycare
facilities and employee gyms.
The company throws parties to
promote good morale and loyalty.
And I think we have a closenesst
maybe some other companies don't have.
I'm taking tennis lessons during
my lunch hours. That's fun.
Tonight we're having beer and
everybody's sitting around having fun.
As a corporation,
Nike may represent the best ande
worst of American business in the 1980s.
Aggressive entrepreneurship
combined with expert marketing,
while at the same time trading American
jobs to increase short term pro.
So what about corporate
responsibility? I think
that corporations should be good
corporate citizens and I think t
they should take into account tt
when they target a particular market,
especially a low income market
involving consumers who are children,
that they are creating a pressue
and a need that wouldn't have
existed but for their marketing.
And therefore I think that they have a
responsibility to be sensitive to the
particular consumers that they are targeting.
But Nike doesn't plan to let up.
They are working to expand
and dominate the international
market for athletic apparel.
Phil Knight wants to revolutione
the European market next.
Recently they purchased an
American sports cap manufacturer
and are planning to open up Nike
superstores around the country.
In an industry where style is everything,
another fast running brand could easily
catch on with trend conscious consumers.
It's a very volatile industry.
And you have to keep coming up
with new concepts and new athle.
And as soon Americans are extrey
loyal to a brand until that
brand doesn't keep up with them.
And that happened in Nike
once when Reebok came in,
and it can very easily happen a.