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Nike Brand Problem? Colin Kaepernick, Betsy Ross Flag, China, and #MeToo Revisited

Nov 19, 2019 | 0 comments

By Lisa Merriam
AMA New York Board of Directors

nike-brand-problemThe Nike brand problem this year begs the question of the impact of Colin Kaepernick, the Betsy Ross flag shoes, Chinese pressure to pull Houston Rockets merchandise, and the ongoing & #MeToo controversy. Last year when we covered the marketing implications of Nike’s Colin Kaepernick ad, we promised to follow up with a state of the brand a year later. Who knew Nike would be embroiled in a year of controversy? And what is the ultimate impact on the brand?

Nike Brand Problem # 1 Betsy Ross Flag Sneakers

In addition to honoring kneeling football players, Nike abruptly removed its special edition 4th of July Nike American Flag Betsy Ross sneakers from the market. Colin Kaepernick complained that the traditional “Betsy Ross” flag on them is racist. Rush Limbaugh responded by selling a “Stand up for Betsy Ross” t-shirt that raised $3 million for the Tunnel to Towers Foundation (a non-profit that supports the families of fallen first responders) in the first month. That’s rounding error for Nike however.

Nike Brand Problem # 2 Removing Houston Rockets Merchandise in China

Following a tweet in support of Hong Kong by a Houston Rockets employee, Nike pulled all Houston Rockets merchandise from stores in China  in early October. Nike has said: “”Nike is a brand of China for China,” so a principled stand would be financially costly for the brand in a way that supporting Colin Kaepernick’s views of racism in America is not. China represents 17% of Nike’s revenue and is a major source of growth for the company. One wag has suggested an update on Nike’s Kaepernick ad: ““Believe in something, unless it upsets the Chinese government.”

Nike Brand Problem # 3 Ongoing #MeToo Issues

Mary Cain, a Nike Oregon Project team member and “the fastest girl in America,” revived Nike’s #MeToo problems with allegations of physical and mental abuse by Nike trainers—a charge echoed by other female Nike athletes across a number of sports. These new charges follow last year’s revolt by female executives against the “toxic” culture at Nike’s Oregon headquarters.

Nike Brand Problem # 4 Kaepernick’s NFL Workout

And last week, Nike was back in the spotlight with Colin Kaepernick’s much-hyped NFL workout in Atlanta. Nike reportedly planned a marketing blitz around the event. When the event turned into a fiasco, Nike told the Wall Street Journal that Nike said it was “confused” that the NFL drew them into the controversy. Colin Kaepernick has evolved from hero to prima donna, which is not a good look for Nike. It is unlikely more Kaepernick ad Emmy awards will follow.

Nike Brand Problem that Isn’t

Is all this controversy good for the brand? An old marketing saw is all PR is good PR; essentially attention drives results. Nike’s stock closed on November 19, 2018 at $71.48 a share. It closed on November 18, 2019 at $94.18 a share. Though Nike’s stock experienced more dramatic ups and downs this past year, the end result is a gain.

nike brand stock performance 2018

nike brand stock performance 2019

On the revenue side, Nike revenue in 2018 was $36.4 billion and it is on track to grow to over $39 billion this year.

Nike brand revenue growth

One wonders how much better (or maybe worse) Nike would perform if it stood on the other side of these controversies, but there is no way to answer that. Perhaps my teenage son’s attitude is insightful to the Nike brand problem: “I don’t care about the politics of the cleats I wear.” Nike’s brand power may not rest on its “woke-ness” or lack thereof, but on the strength of its products. According to my son, the cleats are great.

These views are the author’s alone and do not necessarily reflect the opinions of the American Marketing Association New York.

 

About the Author:

Lisa Merriam serves on the American Marketing Association board of directors and is chairman of the communications committee. She is a marketing, brand, and content consultant at Merriam Associates. She is the co-author with Milton Kotler of Weaponized Marketing: Defeating Islamic Jihadists with Marketing that Built the World’s Top Brands, Rowman Littlefield, Spring 2020.

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