Nike Should Move Production to the US and Make America Great Again
Nike is a global sport, clothing and shoe supplier and retailer with over 1000 retail outlets in the US and with global brand recognition. Since its founding in the 1960s, the company has dominated the sporting industry with its apparel, shoes, accessories and sporting productsâ€”from golf balls to tennis rackets. One reason for its success has been its ability to brand itself as the company that produces the products champions use. Nike is associated with winners like Michael Jordan and Tiger Woods and LeBron James. When people think of Nike, they think of winning, and the trademark phrase of the companyâ€”â€œJust Do Itâ€â€”has inspired millions of customers to put on Nike gear and go out onto the field to give it their all.
Overview of Firm
Nike was founded by Phil Knight and Bill Bowerman as Blue Ribbon Sports in 1964. The name of the company was changed to Nike it rebranded itself with a more motivational and inspirational tie-in: the Nike swoosh sign and the phrase â€œJust Do Itâ€ which appeared in the subsequent decades as the company came to define itself through advertising (Peters).
Phil Knight was always heavily involved in guiding the company and making sure that it used the best brand ambassadors to show Nike in a positive light. Nike paid heavily to sign star athletes to contracts so that the company could promote its shoes and other products by getting the celebrities of the sporting world to wear them. The companyâ€™s first line of Air Jordans was like a new dawn for Phil Knight, who had the vision to see the Nike Empire unfolding before his eyes. The Air Jordan campaign caught fire and turned Nike into a powerhouse.
Under Phil Knightâ€™s guidance, Nike charged ahead in terms of stock price, breaking out from under 50 cents per share in the 1980s to over $80 per share today. While not all of the companyâ€™s stock performance can be attributed to the companyâ€™s branding strategy (share buybacks and central bank intervention also help to keep stock prices levitated), Nikeâ€™s brand has become so recognizable and trusted that it is literally associated with winning.
Ownership of the company has not changed hands at all since Phil Knight started the companyâ€”other than to go public, which happened in 1980, early on in the companyâ€™s history.
Strategic Brand Analysis
Nikeâ€™s vision is to â€œto bring inspiration and innovation to every athlete in the world.â€ Its mission is to create â€œgroundbreaking sport innovations, by making our products more sustainably, by building a creative and diverse global team and by making a positive impact in communities where we live and workâ€ (â€œAbout Nikeâ€). Its brand values include enhancing performance, providing authenticity, developing innovation and creating sustainability. The development of an iconic brand campaign aligns with these brand values (Storey).
From the beginning, Nike has sought to associate itself with winners, with champions, with beloved athletes who have star appeal and who have millions of fans because of their success on the field or court. However, in 2018 Nike did something a little different. It signed ex-NFL quarterback Colin Kaepernick to a big marketing contract and used his appearance on billboards and commercials in the US to appeal to â€œwoke cultureâ€ and throw itself into a political arena that alienated a lot of fans. Kaepernick was never a champion on the field and never did much to win millions of fans through his athletic skills. What he did do was to launch a controversy over etiquette during the singing of the National Anthem. He either sat or knelt in an expression of frustration over the deaths of unarmed black men by police. His antics led to other teams not wanting to sign him and even raised the ire of President Trump who voiced his disapproval over someone not standing for the Anthem.
Prior to Nikeâ€™s use of Kaepernick, it had one of the strongest brand positions in retail. It was a globally recognized name with celebrity star appeal and talent to back up and promote its products. It was not controversial unless one wanted to look at where its shoes were made (but most consumers do not care about that). Then the company went with Kaepernick and suddenly consumers were literally burning their Nike gear in their driveways and posting the videos onto YouTube and Facebook to show their displeasure with the company for promoting an â€œunpatrioticâ€ no-talent â€œstarâ€ like Kaepernickâ€”such were the feelings of the angry mob (Global News). Consumer behavior was divided: some consumers (largely conservative and supporters of President Trump) vowed never to shop Nike again. Other consumers loved the campaign and they continued to shop and buy Nike.
In going with Kaepernick, Nike was attempting to raise its stakes in the consumer consciousness. It was an attempt to show a sense of corporate social responsibility by aligning itself with the needs of the underprivileged, marginalized and oppressed. Kaepernick represented something other than winning: he represented social consciousness. Nike had always turned to winners to promote its brandâ€”people like Jordan and James. Now it was turning to someone who was not even playing but who was trending for casting himself as a political victim.
By entering into the victim market, Nike signaled that it was doing something new. Was it a head fake to throw other brands off? Competition has been growing in the sports retail industry. Both Steph Curry and Kawhi Leonard signed with competing brands in recent yearsâ€”Steph with Under Armor and Kawhi with New Balance. As they are top tier NBA stars alongside James, it looks like Nike is no longer the number one brand for representing greatness on the court. So is that why Nike tried to shift gears by going with Kaepernick? Or was Nike attempting to get other brands to follow only to circle back, sign up the next generation of talent and close the door on competitors who had been misled by the company into trekking into the social consciousness market? So far no other competitors have followed Nikeâ€™s lead, which looks like a big marketing mistake considering the backlash and alienation it received. It is almost as bad as Gilletteâ€™s attempt to lecture its consumer base for displaying toxic masculinity for the last century. Consumers do not want to be lectured by companies that come across as holier than thou, and yet that is just what it seems that Nike and Gillette were doing in recent years.
Thus, with the Kaepernick campaign, brand trackingâ€”which had been going well enoughâ€”hit a wall. The brand funnel showed it clearly as did social media, where outraged consumers were burning their Nike goods. Brand momentum with conservative voters died. As Morning Consult showed, Nike favorability dropped double digits following its new â€˜Just Do Itâ€™ Campaign with Colin Kaepernick: â€œBefore the announcement, Nike had a net 69 favorable impression among consumers, it has now declined 34 points to 35 favorableâ€ (Morning Consult). Even among core demographics and the target markets of young consumers, Nikeâ€™s brand took a hit and fell. Purchasing considerations decline, as before the campaign 49% of Americans surveyed said they would love to buy a Nike product, and that percentage fell to 39% after the campaign (Morning Consult). Most consumers saw the campaign as a publicity stunt by a company attempting to appear relevant and â€œwokeâ€ by signing a trending political activist who used to play sports.
With the rise of COVID 19, now is a pivotal time for Nike to get back some of its brand momentum and positioning. With supply chains disrupted, Nike could shift production to the US and produce Made in USA shoes to help win back some of the conservative demographic it has lost. It should cut ties with Kaepernick and start reinvesting in star athletes who have positive images are who are role models. It would also be a move that would be considered ethical by others, since the ethics of relying on underpaid slave laborers in Asia to make their shoes is questioned by some, who see Nike as a exploitative. Moving to America would help Nike to reshape its image and show that it is making America first, just as the president of the US wants to see happen. Nikeâ€™s brand image would skyrocket among conservative voters in an instant and it would likely rise among other demographics who have been put out of work permanently by coronavirus and would see Nike as a place to get a new job. These micro and macro environment factors are issues Nike should seriously consider now that the world is changing and Nike needs to improve its image.
Its customer relationship management process could stand to improve through the use of social media, and by using sites like Instagram and YouTube, the company could ask consumers to upload inspirational pics of them with their Nikes during this time of quarantine. That would be a good way to keep consumers engaged with the brand and to inspire creativity. With sales likely to move more and more online, Nike could also consider allowing consumers to design their own shoes online for purchase the way Vans does. This would also promote consumer engagement.
Nike has been at the top of the sports apparel and retail world for decades, but with increasing competition and its decision to promote â€œwokeâ€ culture, the Nike brand has suffered. Nike needs a way to reconnect with consumers, and the macro and micro environmental issues of today could be exactly the issues Nike can leverage to regain its position at the top. Jobs are need in the US, slave labor is unethical, and Nike needs to save faceâ€”moving its production to the US and canceling its contract with Kaepernick would help Nikeâ€™s brand immensely.
â€œAbout Nike.â€ Nike, 2000. https://about.nike.com/
Global News. â€œNike shoes burn on social media as Colin Kaepernick features in â€˜Just Do Itâ€™ campaign.â€ Global News, 2018 https://globalnews.ca/news/4425379/nike-shoes-burn-colin-kaepernick/
Morning Consult. â€œNike’s Favorability Drops Double Digits Following New â€˜Just Do Itâ€™ Campaign with Colin Kaepernick.â€ Morning Consult, 2019. https://morningconsult.com/form/nike-kaepernick-report/
Peters, Jeremy. â€œThe Birth of â€˜Just Do Itâ€™ and Other Magic Words.â€ The New York Times, 19 Aug 2009. https://www.nytimes.com/2009/08/20/business/media/20adco.html?_r=3&ref=business
Storey, G. â€œNike and the importance of meaningful brand values.â€ Polpeo, 2019. https://polpeo.com/nike-and-the-importance-of-meaningful-brand-values/
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