Quan Nguyen
CONTROVERSIAL MARKETING OF NIKE
International Business 2022
VAASAN AMMATTIKORKEAKOULU UNIVERSITY OF APPLIED SCIENCES International Business
ABSTRACT
Author Quan Nguyen
Title Controversial Marketing of Nike
Year 2022
Language English
Pages 65
Name of Supervisor Teemu Myllylä
Nike is one of the biggest footwear manufacturers in the world. Since the begin- ning, controversial marketing has been used as the brand’s marketing plan. The target of the thesis is to research the controversial marketing of Nike.
The thesis uses several theoretical frameworks aligned with the target brand’s overview. The research is based on secondary data. It depicts Nike’s overall situa- tion, which led to the decision to launch a controversial advertising campaign in 2018.
The research results illustrate how Nike successfully uses controversy as a market- ing tool to boost the brand’s reputation and profitability. As a result, the conclu- sion identifies whether controversial marketing is effective or risky with other companies.
Keywords controversial, marketing, advertising
CONTENTS ABSTRACT
1 INTRODUCTION ... 7
1.1 Overview ... 7
1.2 Purpose of thesis ... 7
1.3 Literature review ... 8
2 MARKETING ... 9
2.1.1 Target market ... 10
2.1.2 Customer orientation ... 10
2.1.3 Integrated Marketing ... 10
2.1.4 Profitability ... 10
3 CONSUMER BEHAVIOUR... 12
3.1 Factors affecting consumer behavior... 12
3.1.1 Psychological factors ... 12
3.1.2 Social influences ... 17
3.1.3 Social class ... 19
3.1.4 Culture ... 20
3.2 Purchase situation ... 21
3.3 Problem-solving processes ... 22
4 BRANDING ... 23
4.1 Creating a brand ... 23
4.2 Consumer and brand relationship ... 23
4.3 Brand decision-making process ... 24
5 ADVERTISING ... 25
5.1 Advertising steps ... 25
5.1.1 Setting advertising objects ... 25
5.1.2 Setting advertising costs ... 26
5.1.3 Developing advertising strategy ... 26
5.1.4 Evaluating advertising campaigns ... 27
5.2 Controversy as an advertising tool ... 27
5.2.1 Subjects of controversial advertising ... 28
5.2.2 Ethics ... 28
5.2.3 Steps in choosing controversial advertising ... 29
5.2.4 Cross culture ... 30
5.2.5 Positives of controversial marketing ... 30
5.2.6 Negatives of controversial marketing ... 31
6 CONSUMER MEASUREMENTS... 32
6.1 Response to controversial advertising ... 32
7 RESEARCH METHODOLOGY ... 34
7.1 Research process... 34
7.2 Research methods ... 35
7.3 Case study explanation ... 36
7.4 Liability and validity of the research ... 37
8 RESEARCH RESULTS ... 38
8.1 NIKE ... 38
8.1.1 Company history and introduction ... 38
8.2 Nike’s marketing strategy ... 39
8.3 Nike’s targeting and segmentation ... 40
8.3.1 Targeting ... 40
8.3.2 Segmentation ... 41
8.4 Nike’s marketing mix ... 42
8.5 Nike’s consumer behavior ... 43
8.6 Nike brand ... 43
8.7 Nike’s advertising strategies ... 45
8.8 Controversial advertising of Nike ... 46
8.8.1 Overview ... 46
8.8.2 Controversial advertising strategy ... 47
8.8.3 Consumers’ measurements... 49
9 CONCLUSION ... 53
10 REFERENCES ... 54
LIST OF FIGURES AND TABLES
Figure 1. The marketing concepts (Keane, 2018) ... 9
Figure 2. A model of buyer behavior (Perreault & McCarthy, 2002) ... 12
Figure 3. Maslow's hierarchy of needs in beer industry (Howell, 2018) ... 13
Figure 4. The learning process (Perreault & McCarthy, 2002)... 15
Figure 5. Lifestyle dimension (Perreault & McCarthy, 2002) ... 16
Figure 6. Modern family life cycle (Perreault & McCarthy, 2002) ... 19
Figure 7. Characteristics and relative sizes of different social class groups in the United States (Perreault & McCarthy, 2002) ... 20
Figure 8. Proposed response model for controversial advertising (Waller, 2006)32 Figure 9. Nike's segmentation, targeting, and positioning (edrawmind.com) ... 40
Figure 10. Nike CBBE model ... 44
Figure 11. AIDA model (digitalstrategyone.com) ... Error! Bookmark not defined. Figure 12. "Just Do It" campaign featuring NFL player Colin Kaepernick (The Guardian, 2018) ... 46
Figure 13. Nike consumers and general public's opinions about Colin Kaepernick (YouGovAmerica, 2018) ... 48
Figure 14. Nike's online sales during Labor Day week, 2018 vs 2017 (Edison Trends) ... 50
Figure 15. Nike stock chart (Berr, 2018) ... 51
Figure 16. Nike customer response of Colin Kaepernick advertising campaign ... 51
1 INTRODUCTION
1.1 Overview
Marketing is one of the most important aspects of a business or an organization.
Many marketing campaigns are being released simultaneously. As a result, there is a considerable number of mixed opinions about using controversy as a market- ing tool to boost a brand's reputation and profitability (Fornillos, 2020). Contro- versial marketing is being witnessed more and more often nowadays, and it is be- coming a debatable problem.
1.2 Purpose of thesis
The idea for the thesis began to form when many advertisements went viral on social media because of their controversial content. In the contemporary world where social media is dominating, it is inevitable for people not to be exposed to thousands of advertisements in their daily lives. Controversial advertising has been applied for a long time, and its usage has significant rise through the decades. Sev- eral famous, controversial commercials come from popular brands such as Nike, Pepsi, and Microsoft (Green, 2018). Because Nike is the author's personal brand preference, so it becomes the thesis's target.
Brands compete against each other every day, targeting to become the most pop- ular brand in their field. To reach this achievement, companies use several ways to increase customers' relationships and values. Nowadays, people are witnessing many companies publishing, making it harder to become one of the most popular brands in their fields. They utilize several ways to increase customers' relationships and values to reach this achievement. Controversial marketing is one of the most common methods, which is a tactic whereby a brand intentionally offends or sur- prises the audience by violating the norms of social and personal values and mor- als. The target is to generate subsequent debates and discussions around the brand and draw attention. Nike, standing in a queue of several giants such as
Adidas, Puma, and Reebok, is using controversial marketing as one of its most competitive advantages. Therefore, many questions are set for this issue:
Why does Nike use controversial marketing to divide customers' points of view?
How does it affect the brand’s reputation and revenue?
Will the subsequent effect satisfy the brand's expectations after using con- troversy?
Is it an effective method or a risky move?
The above questions are the bases of this thesis. The answers are analyzed through basic marketing theory, divided into consumer behavior, branding, and advertis- ing. Controversial marketing stands out from marketing and people's opinions and measurement results. These occur through social media and viral content, which may bring either positive or negative outcomes (Fornillos, 2020).
1.3 Literature review
Acknowledging branding and where it integrates into general marketing theory is crucial to determining whether the decision to use controversy as a method of brand growth is flourishing. Consumer behavior reveals the variables involved in selecting the best brand while making purchases. How brands seem to consumers has a significant role in decision-making. In numerous ways, choosing a brand is related to marketing that brand. The final section introduces the idea of its influ- encing variables because the thesis's primary question raises issues with contro- versial advertising.
2 MARKETING
According to the American Marketing Association, marketing is the planning and implementing the creation, pricing, and distribution of concepts, products, and services to generate exchanges that satisfy individual and organizational objec- tives. In other words, marketing exists at both the micro and macro levels. Micro- marketing is the practice of actions intended to achieve an organization's goals by foreseeing customer or client wants and coordinating the flow of need-satisfy- ing products and services from producers to customers or clients. This definition applies to both profit and nonprofit organizations. Most clients and customers pay for the goods and services, while others may get them at a discounted price or be accessible via private or government funding. Macro-marketing, like micro- marketing, focuses on the flow of goods and services from producer to con- sumer. However, the emphasis on macro-marketing is on something other than the activities of individual organizations. Moreover, it is a social process that ef- fectively matches supply and demand and accomplishes society's objectives. In other words, marketing is aligned with every aspect of daily life. (Perreault &
McCarthy, 2002)
The marketing concept states that the key to achieving its organizational goals is to be more effective than opponents in creating and communicating customer value to its target markets. Target market, customer orientation, integrated mar- keting, and profitability are the four pillars of marketing concepts.
Figure 1. The marketing concepts (Keane, 2018)
2.1.1 Target market
Before releasing excellent marketing campaigns, businesses usually thoroughly define their target market. For instance, Dove offers a wide range of shampoos and conditioners based on the various hair types of its consumers.
2.1.2 Customer orientation
There needs to be more than just defining the target market to outperform oppo- nents and perform successfully in the market. A business may identify its target market yet need to comprehend the demands of its clients. When a brand recog- nizes the wants and needs of its customers, customer satisfaction is attainable.
2.1.3 Integrated Marketing
Integrated marketing is the outcome of all departments working with stakeholders to fulfill the customers' interests. Customers' satisfaction may derive from coordi- nated efforts. First, it is crucial for all marketing functions to collaborate, including sales, advertising, customer service, product management, and marketing re- search. Second, purchasing, production, personnel, and finance divisions must em- brace marketing. Also included in integrated marketing is coordination with stake- holders. An organization may establish synergy to achieve goals through inte- grated marketing.
2.1.4 Profitability
An essential goal of the marketing concept is to help companies attain their objec- tives. In the case of private companies, the principal objective is long-term profit- ability, while the social and nonprofit organization's target is surviving and alluring sufficient funds to operate works. A successful company makes money by satisfy- ing its customers better than its opponents.
There are several possible ways to satisfy target customers' needs. A product might have different features, and the brand name, package, and policy can be
adjusted. When the organization is ready, it can create communication and deliver customer value. The marketing mix, which is also known as the "four Ps": Product, Place, Promotion, and Price, includes the possible variables of marketing. A de- tailed examination of these four elements can assist a marketing expert in devel- oping a strategy for successfully introducing or reintroducing a product to the pub- lic. Product is the element that helps the brand create the right "product" for the target market. Place elements will identify the target market's place where the products are wanted. Promotion involves informing the target market or others in the distribution channel about the "correct" product. The last P, Price, considers the kind of competition in the target market and the cost of the whole marketing mix. Each of the four Ps plays a significant role in developing a successful market- ing mix.
3 CONSUMER BEHAVIOUR
The field of consumer behavior studies individuals, groups, or organizations and the process they use to select, secure, use, and dispose of products, services, ex- periences, or ideas to satisfy needs and the impacts these processes have on the consumer and society.
Figure 2. A model of buyer behavior (Perreault & McCarthy, 2002) 3.1 Factors affecting consumer behavior
To understand why consumers buy, many marketers turn to the behavioral sci- ences for help. Specific consumer behaviors vary significantly for different prod- ucts from one target market to the next. However, general behavioral principles frameworks help marketing managers learn more about their target markets.
3.1.1 Psychological factors
One of the most prominent aspects influencing purchase decisions is psychological variables, which include motivation, perception, learning, attitudes, and lifestyle.
First of all, people are motivated by needs and wants. While needs are the primary
incentive for making people do something, wants are "needs" learned during per- sonal experience. For example, many teenagers need a new pair of shoes, but a few learn that they want a pair of Air Jordan 1 instead of Adidas shoes. As a result, when a need is not satisfied, it may lead to a drive, a stimulus that encourages action to reduce the need. In marketing, a product purchase results from a drive to satisfy some need. Some arguments state that brands try to manipulate their customers to buy products against their will, but drives are internal factors. There- fore, a good company studies what consumer drives, needs, and wants already exist and how they can be satisfied better.
Figure 3. Maslow's hierarchy of needs in beer industry (Howell, 2018) According to motivation theory, humans never reach a state of complete satisfac- tion. When our lower-level demands are reasonably met, those at higher levels take over. It explains why marketing efforts aimed at consumers in advanced econ- omies frequently focus on higher-level requirements.
Along with motivation, perception, which illustrates the outside world from some- body's point of view, varies with customers to meet their demands. People are
usually exposed to advertisements, promotions, or stores, but they choose to ig- nore lots of them because of the following selective processes:
1. Selective exposure: identifying the information that catches the demands.
2. Selective perception: eliminating ideas, thoughts, and facts that contradict pre- vious attitudes and beliefs.
3. Selective retention: remembering what they want to remember.
These selective processes explain why most advertising will not affect ignorant customers. They do not see or remember them because they do not meet their satisfaction.
Customer needs affect these above processes, and current needs receive atten- tion. For instance, customers saw a Nike ad about an upcoming sneakers release, they wanted them but decided to ignore them due to their high initial price. After a month, they received a new Nike discount campaign, which made the shoes af- fordable, they would check their wanted pairs back.
Marketers are interested in these selective processes because they affect how consumers get and filter information and are also concerned about customers' learning process.
Besides perception, learning is also an aspect that changes personal opinions be- cause of previous experience. A child bought Fazer and Oreo biscuits to taste and
decided that Fazer's product was better than the Oreo one. The above example shows how the learning process occurs.
Figure 4. The learning process (Perreault & McCarthy, 2002)
Experts illustrate several steps in the learning process. First, due to the cues - stim- uli, ads, or products - an individual chooses some specific response, which is an effort to fulfill a drive. The chosen response depends on the cues and personal experience. During the learning process, reinforcement occurs when the drive de- ducts. Reinforcement plays a role as an alignment between the cue and the re- sponse. Reinforcement repetition will develop a habit, which becomes the individ- ual's decision process routine. The learning process usually happens daily. A hun- gry person, whose hunger made him go to the market, saw a snack bag of Lays. He knew this brand but had not tried it once - a cue - then he responded by buying a bag. If he liked the Lays' snack bag, positive reinforcement would form. Therefore, good experiences can bring positive attitudes towards the products and the man- ufacturing company.
Solomon (2008) states that an attitude is an evaluation of a product or service formed for the long term. Consumers have attitudes towards very product-specific behaviors as well as towards more general consumption-related behaviors. A con- sumer may have positive or negative beliefs toward a product or service due to long-term experiences. As a result, researching consumer attitudes and beliefs may help marketing managers better understand markets.
The final aspect of psychological variables is personality or lifestyle, which plays a vital role in consumer behavior. Sallie B. Middlebrook (2022) illustrates personality as "all the internal traits and behaviors that make a person unique." Most market- ers believe purchasing products is often affected by personality and personality- aligned characteristics. Along with personality, lifestyle is the unique, consistent pattern that reflects a person's overall outlook on life and consumption habits.
Figure 5. Lifestyle dimension (Perreault & McCarthy, 2002)
Figure 5 shows several variables in a person's Activities, Interests, and Opinions, sometimes known as AIOs, with demographics used to determine the lifestyle pro- file of a target market. These AIO dimensions help marketers to better understand the target customers, especially in creating advertisement campaigns. For exam- ple, the according to Statista, 63 percent combined of American NBA fans are Gen Y (1980-1994) and Gen Z (1995-2012) people, which may be interested in fast food. As a result, many fast-food companies, such as McDonald’s or Mountain Dew, advertise during an NBA match's halftime.
3.1.2 Social influences
This part will analyze how the individual interacts with family, social class, refer- ence groups, and culture to affect buying decisions.
According to Chandrasekar and Raj, family is one of the most critical aspects of the social dimension that may heavily affect customer behavior. R (2013), a family is a group of two or more people related by blood marriage or adoption who reside together. A nuclear family is a small group of father, mother, and children, while an extended family includes a nuclear family and other relatives, such as grand- parents, cousins, and parents-in-law.
Therefore, family influences can be studied by the nature of family buying roles, family dynamics, and family life cycle.
Family buying roles
K S Chandrasekar and Vinay Raj. R (2013) listed a variety of family members' roles in the purchase decision-making process:
Initiator(s): the member who first recognizes a product's or service's needs, which will start the purchase process.
Information gatherer(s): the individual interested in a specific acquisition.
Influencer(s): the person who influences the alternatives evaluated, the criteria considered, and the final choice.
Decision-maker(s): the member who makes the final decision. However, other joint decisions also occur.
Purchaser(s): the member who makes the purchase.
User(s): the user of the product.
Family dynamics
Family influence on consumer behavior exists because of the relationship between family members. The purchase decision usually depends on the dynamics of the husband-wife. There are several decision types based on spouses' influences:
Wife-dominant decisions (home decoration, trees) Husband-dominant decisions (cars, televisions) Joint decisions (schools, vacations, insurance)
Autonomic or unilateral decisions (newspapers, cigarettes) (BBAMantra)
Family life cycle
Family life cycle marketing is a method of selling to consumers based on their life stages. The Association for Consumer Research illustrated that the definitive life cycle marketing model was made in the 1960s by Wells and Gubar.
Figure 6. Modern family life cycle (Perreault & McCarthy, 2002)
Young single and young couples without children are most interested in discre- tionary products, such as fashionable clothing and accessories. These younger families - with no children - also aim for durable goods like vehicles and furniture.
When children are born, the payments gradually shift to soft goods or services, such as food, education, and medical care. Divorce has been gradually increasing recently and intervenes in the family life cycle stages. The mother usually has cus- tody to raise the children, while the father is responsible for the child support.
Single parents pay significant money for housing, childcare, and other necessities and neglect their discretionary purchases. If a single parent remarries, the family life cycle may restart. (Perreault & McCarthy, 2002)
3.1.3 Social class
Social class has a significant impact on consumer behavior, along with several fac- tors. A social class is a people's group who have approximately equal social posi- tions as viewed by others in society. Social class is rooted in social stratification.
Thus, social class is often viewed as a relational concept (Wright, 1993), where classes are defined - and ranked - relative to one another. A social class structure exists in almost every society. It is closely related to individual occupation, but it
might be influenced by education, community involvement, birthplace, wealth, possessions, and other elements. People from different social classes have differ- ent beliefs and feelings. Most countries have some general alignments between income level and social classes. However, income is only sometimes the specific element since people in different social classes may have different ways of spend- ing their money. Marketers want to know what the buying process in different social classes is. Figure 7 depicts a social class structure in the United States. Mar- keters can learn about the social class of a target market by conducting marketing research surveys or using publicly available census data. (Perreault & McCarthy, 2002)
Figure 7. Characteristics and relative sizes of different social class groups in the United States (Perreault & McCarthy, 2002)
3.1.4 Culture
Culture, along with mentioned elements, also plays an essential role in affecting consumer behavior. In Matthew Arnold's Culture and Anarchy (1993), culture is
defined as "a pursuit of our total perfection using getting to know, on all the mat- ters which most concern us, the best which has been thought and said in the world; and through this knowledge, turning a stream of fresh and free thought upon our stock notions and habits"; "the culture we recommend is, above all, an inward operation." Cultural researchers have analyzed many different dimensions of culture over the years. For example, Hofstede (2011) describes six factors of national cultures: Power Distance, Uncertainty Avoidance, Individualism/Collectiv- ism, Masculinity/Femininity, Long/Short Term Orientation, and Indulgence/Re- straint. Culture is the fundamental determinant of consumer behavior. People in different cultural groups have different outlooks and buying behavior. For in- stance, according to Hofstede's cultural dimensions, Asian countries such as China or Vietnam have a higher uncertainty avoidance index than Western countries.
Aging may reduce impulse buying in Asia while having no effect in American coun- tries. Another example showing the connection between culture and marketing is motorbike companies in Asia. While Western people see their vehicles as their possession, Asian people, living in a more collectivist, family-oriented culture, usu- ally want a motorcycle as family wealth. Moreover, motorcycles are more afford- able in Asia, where people have lower income levels. Understanding the cultural fundamentals is the starting point for companies when entering new markets.
That is why many brands failed to expand successfully into new markets (Yoder, Visich, & Rustambekov, 2016).
3.2 Purchase situation
Factors such as purchase reasons, time, and surroundings affect consumer behav- ior. First, the reason a consumer makes a purchase can affect different buying pro- cesses. For example, a person going to the gym wants a banana or a protein bar before the session, while a long-studying-day student needs a hamburger to sat- isfy his hunger.
Next, time also influences purchase decisions. When consumers make a purchase - and the time they have available for shopping - they will differ in their behavior.
A group of friends may choose Espresso House, while the employee on the way to work may buy a vending-machine coffee in the market.
Finally, surroundings can affect buying behavior. For instance, the possibility of impulse buying is raised by over-stimulation, which includes a pleasant, incredibly stimulating, and intriguing store environment. (Perreault & McCarthy, 2002)
3.3 Problem-solving processes
When every influencing factor is considered and utilized as much as possible, the next step is the process where consumers make their buying decisions. A con- sumer can formulate a five-stage model with a particular path through these ques- tions. The steps are problem recognition, information search, alternatives evalua- tion, purchase decision, and post-purchase behavior. The actual purchase is the fourth step, so the process begins long before a consumer takes action. Some con- sumers will only follow some of these steps and might skip or reverse some of the stages.
The first step of this model occurs when a buyer recognizes a problem or need, usually triggered by internal or external stimuli, such as hunger. This step leads the direction into the second step, which is information search. Searching for infor- mation occurs through several sources, like private groups, commercials, and pub- lic or previous experiences. The third step includes choosing the correct label and picking the right fit from all the alternatives. Through the purchasing process, con- sumers will acquire beliefs and attitudes towards which brand to use besides be- liefs and attitudes that already show direction to which brand to use. Also, evalu- ating different brands' negatives and positives will help make the final decision.
Finally, a consumer makes the buying action and makes the final call on the chosen brand. After the purchase, the consumer will gather post-purchase behavior, in- cluding disquieting features, and hear favorable items about the brands they did not choose. (Kotler & Keller, 2009).
4 BRANDING
Branding is utilizing a name, symbol, or design to determine the product. The brand name has a narrower meaning. A brand name is a word, a letter, or a group of words or letters. Examples include America Online (AOL), WD-40, 3M Post-its, and PT Cruiser (Perreault & McCarthy, 2002).
4.1 Creating a brand
Brands are a company's most valuable intangible assets, and marketing is respon- sible for properly managing their value. Building a solid brand is an art that re- quires careful planning, a long-term commitment, and creatively prepared and managed marketing. A successful brand commands strong consumer loyalty be- cause it offers a superior product or service. (Kotler & Keller, 2009).
Brand recognition facilitates shopping. Many customers are eager to purchase new items, but after gambling and winning, they prefer to purchase a sure thing the next time. Brand promotion benefits both branders and customers. A strong brand reduces the marketing professional's selling time and effort. Furthermore, in some cases, a company's brand name is the only element of its marketing mix that a competitor cannot replicate. Furthermore, good brands can boost the com- pany's image, hastening the acceptance of new products marketed under the same name. Many consumers, for example, tried Starbucks' coffee-flavored Frap- puccino beverage as soon as it appeared on grocery store shelves because they already liked Starbucks' coffee (Perreault & McCarthy, 2002).
4.2 Consumer and brand relationship
As previously stated, it is critical to establish a positive relationship between a brand and a consumer because the consumer is the one who makes the purchas- ing decision. The main goal of marketing is to gain a customer's value and relation- ship, which is why it is critical to understand how a consumer develops the right kind of relationship with the brand. The relationship begins to form when a brand
identifies the product manufacturer's source, and customers can then delegate responsibility to a specific distributor or manufacturer. In addition to the con- sumer developing trust in the manufacturer, the entire brand must take on a unique meaning in the consumer's eyes. To develop meaning for a brand, consider consumers' experiences with the product and its marketing program over time.
Consumers try to determine which brands meet their personal needs and which do not. They are ready to give their trust and loyalty after discovering the best brands that meet their needs for these manufacturers. This creates expectations that the brand will act in specific ways and provide consistent product perfor- mance and appropriate pricing, promotion, distribution programs, and actions (Keller, 2013).
4.3 Brand decision-making process
As pointed out in the past paragraphs, consumer-buying action occurs in several steps. One of these steps is selecting the brand that best meets the consumer's needs or desires at the time. All of the previously defined influencing factors, such as previous experiences, excellent brand positioning, and communication, must be considered for this decision-making process. All of the factors influencing con- sumer decision-making will eventually result in a set of brands from which the in- dividual should select the preferred one. If the brand image and positioning are appropriate, the consumer will most likely choose it (Owersloot & Duncan, 2008).
If a consumer has no prior experience with the brands, they must be evaluated from the consumer's perspective. Consumers must evaluate the parts of the brands they know to form an opinion about the best alternatives. Aside from al- ready familiar information, consumers seek additional information from the pre- viously discussed reference groups. Consumers will keep the brands that will most likely meet their needs while criticizing them through negative and positive search judgments made earlier (Owersloot & Duncan, 2008).
5 ADVERTISING
People are exposed to advertising every day. Advertising is not only print or tele- vision commercials; it is everywhere (Brierley 2002; Sinclair 2012). It is almost im- possible not to see, read or listen to different ads since they are nowadays printed, broadcasted, and outdoors (Brierley 2002; Hackley 2010). Advertising is any form of non-personal presentation of ideas, goods, or services by an identified sponsor.
It includes traditional media like magazines, newspapers, radio, TV, signs, direct mail, and new media such as the Internet. (Perreault & McCarthy, 2002) Adver- tisements can surprise consumers by appearing in daily groceries and other unex- pected places and situations (Duff & Faber, 2011).
According to the American Marketing Association (AMA) (2013), the term adver- tising is described as "the placement of announcements and persuasive messages in time or space purchased in any of the mass media by business firms, nonprofit persuade members of a particular target market or audience about their products, services, organizations, or ideas."
5.1 Advertising steps
Creating an advertisement is a process that needs knowledge and time. By follow- ing the advertising steps, an organization can have an influencing way to com- municate with consumers.
5.1.1 Setting advertising objects
Before executing the advertisement process, organizations have to decide on the target market, the positioning, and the marketing mix. These factors are usually pursued earlier in the process of marketing management. Target market, position- ing, and marketing mix give the frame about the advertisement's primary job. The main point is to have a specific communication task, which can be achieved after deciding on the target audience during a specific period of time. There are several objectives available, but usually, an organization has only one. These can be, for
instance, reporting, convincing, and reminding. By choosing to inform, an adver- tisement will communicate a customer's value, new products, and directions about the product and correct the false impression. In the style of persuasive ad- vertisement, the goal is to build a brand preference to encourage to switch the brand and purchase it now, not later. Nevertheless, if the advertisement is remind- ing, it wants to maintain a customer relationship and remind them that the prod- uct might be needed in the future. There are more objectives besides these, but informing, persuading, and reminding are the most used ones. (Kotler & Arm- strong, 2008)
5.1.2 Setting advertising costs
The budget sets the limit on how much visibility every campaign could have. Every product and service need to have a separate advertising budget. The size of the budget depends on the product's life cycle. Usually, if a brand wants to advertise its latest product, they need a larger advertising budget to build awareness. The second influencing factor is competition. A brand with many competitors will need heavy marketing to get it to stand out. Market share does also impact the adver- tising budget. If a brand is building the market or taking the market share from competitors, it will require more advertising spending as a percentage of the sales.
(Kotler & Armstrong, 2008)
5.1.3 Developing advertising strategy
The third section is to develop a strategy for an advertisement. There are two ma- jor elements: Creating the advertising messages and selecting the advertising me- dia. The message is the most important part of advertising because, with the right message, an advert can be just a good use of money. The advertisement's success is reflected in how much it gains attention and if it communicates well with the consumer. Because advertising aims to spread attention about the brand and get consumers to think about or react to the product or an organization in a certain
way, brands will select their content in the belief that it will benefit the organiza- tion. Creative concepts are formed from these characteristics and will have a memorable way of advertising products and services. (Kotler & Armstrong, 2008) 5.1.4 Evaluating advertising campaigns
The results of the advertising campaigns can tell its effects on communication, sales, and profit. By measuring the communication effects of an ad or an ad cam- paign, organizations can find out are the adverts and the media are positively com- municating the message. It is not easy to measure ad functionality through sales and profit because there are several other influencing factors in that area. (Kotler
& Armstrong, 2008)
5.2 Controversy as an advertising tool
Every advertising campaign has its way of communicating its central message.
Most brands have approaches to how they want to be perceived in advertise- ments. Every approach has a different impact on the consumer's emotions. Some organizations like to use fear or humor to motivate employees, which creates an emotional connection. Other effective methods include using rationality that ap- peals to the practical side, such as sex, sensuality, and fear of missing out. (Wim- bush, 2019) Other methods exist in addition to influencing people's emotions. A celebrity endorsement is one effective strategy. This type of advertising campaign involves a well-known person promoting the organization's brand and products, known as promoting through celebrity. (Riezebos & Van Der Grinter, 2012) It is necessary to understand how advertising with controversy works in addition to the other popular methods of promotion mentioned above.
Every advertisement campaign persuades consumers to buy their brand's prod- ucts and services. As previously stated, different platforms and styles can be used to entice customers. Understanding what controversial advertising keeps inside, the definition of controversy should be clarified. When discussing controversial
topics, it denotes something that generates a lot of debate and arguments, involv- ing various feelings of anger or disapproval. (A. Cramer, 2011)
All the norms in the world define how people evaluate advertising in general.
When some of these norms are broken, the results can be shocking, which hap- pens when businesses use controversy to promote their products. (Bachnik & Na- wacki, 2018) Brands compete fiercely with one another, which is why they are constantly looking for ways to differentiate themselves. Using controversy to cre- ate a shock can be an effective way to get noticed. (Agrawal, 2016) These shocking, controversial advertisements are usually attention-catching, intriguing and origi- nal, which are messages through emotions. (Bachnik & Nawacki, 2018) As Daniel Hennessy has analyzed:" Introducing controversy can be an effective way to get noticed. The cleverest thing an advertiser can do is the opposite of what everyone else is doing. Sometimes it is risky, but it is better to be talked about than not talked about". (Hennessy, Forbes.com, 2016)
5.2.1 Subjects of controversial advertising
Because these types of commercials promote feelings of rage and condemnation, the subject of them must have the most influence on the reason. These are quan- daries between ethically socially acceptable advertising and unethical, problem- atic advertising. When employing these immoral subjects, advertisements might be centered on racial, social, and political issues. Motives and associations refer- ring to eroticism are also considered unethical and controversial, as are images of well-known controversial persons or celebrities presented controversially and hu- man figures presented in a way that implies or maintains negative stereotyping of specific social groups. (Bachnik & Nawacki, 2018)
5.2.2 Ethics
Because most advertising that can be labeled controversial has unethical issues, ethics are a significant component of the dispute. Because the brand's purpose is
to increase brand value, it is critical to have a more positive incentive to focus on ethics. A brand might earn value if it is aligned with ethical behavior. Business eth- ics is critical because unethical activity can lose a company's reputation, hard cash, and share price. Organizations that are considered ethical are more likely to foster confidence among their owners, employees, consumers, and the general public.
Moral awareness should be familiar to organizations. This improves awareness of ethical issues and willingness to consider the broad ramifications. As a result, the brand is able to foster trust while also allowing people to cope with concerns.
Brands should be aware of the various values worldwide by identifying and com- municating the essential, cross-cultural, common moral values that underpin all ethical activities, regardless of culture or geographical location. One of the signifi- cant problems, especially when employing contentious issues to sell a brand, is understanding the right-versus-wrong dilemmas. There is a fine line between is- sues that cross it and may result in a negative reputation. The final step is to apply a set of rules in rational, acceptable, and defendable ways to obtain the few ways to be unethical. (Moon & Bonny, 2001)
5.2.3 Steps in choosing controversial advertising
If a company decides to employ a contentious issue in its advertising campaign, it must take the necessary steps. Contentious issues are frequently surprising, ta- boo, or contested. A brand must have a low risk of anyone being wounded or of- fended. A brand should employ disputed subjects to reduce any potential hazards that the advertisement can bring. This topic may spark disagreement, but it will allow customers to form their conclusions. (Kakkar, 2018)
The connection that businesses should have on a complex subject is the step that determines whether people will be angry or attracted by the brand's advertising campaign. If a corporation can tie the debate to its brand, it can avoid stirring the boil and transfer it into measurable consequences, such as increased sales profit.
(Kakkar, 2018)
The factor that keeps all these together is a crisis management plan. Every organ- ization should be able to handle any possible backlash from the advertising cam- paign. Crisis management should be performed in an organization's plan to have all the tools needed for a catastrophic event. When an organization has a stable crisis management plan, it can avoid a damaged reputation and negative financial impacts. (Kakkar, 2018)
5.2.4 Cross culture
To avoid the controversial outcome of an advertisement, an organization should be familiar with cross-cultural differences. Especially in the mass media, it is critical to know cultural differences. Marketers have to debate cultural differences and similarities if they aim to spread brand messages internationally; this is how they can customize the message for the local culture. Cultural differences are divided into cultural profiling, a tool for specifying cultural styles and preferences. If the brand's goal is to take a global strategy, it has to eliminate all the possible factors that would offend some cultures. This strategy aims to communicate the same basic brand message in every country. (Owersloot & Duncan, 2008)
Familiarity with cross-cultural differences is essential because there are significant waves of immigrants globally. This has changed the multicultural mix of the key consumer markets, which affects the corporate marketing arsenal. It can backfire later if the different cultural and ethnic identities are presented incorrectly.
(Fromowitz, 2017) (Usunier & Lee, 2003) 5.2.5 Positives of controversial marketing
Using controversy as an advertising model, will it usually spread the word about the brand more rapidly, and will it eventually spark interest in a broad population?
Using controversy as a marketing gimmick might work if the organization has a rebellious audience and knows how to use it cleverly or has a tremendously con- troversial mission statement. Suppose an organization is having mischief-making
in the process of creating advertising campaigns. Will this attract all the rebellious audience following the brands, which want to center themselves in the middle of the controversy? (Maff, 2018) Most often, the reason why using controversy can be convenient is if the brands use controversy in campaigns in a highly businesslike and targeted way. These organizations are very familiar with their audience and how they would respond to the advertising campaign. The target audience may be happier about the subject of these types of advertisements but eventually will see the reason behind it. Organizations using the controversy aim to shock their audi- ence but stay true to their brand's mission. It is always risky to have a goal of get- ting people mad, but it can be effective in the end. If an organization has a solid or debatable mission statement, it can be an intelligent way to show it through an advertisement. If this is the goal, it will attract the right kind of consumers the company is looking for. Organizations should always be aligned with their brand, so the marketing would be as powerful as it can be. (Maff, 2018)
5.2.6 Negatives of controversial marketing
The main reason why every organization is not using controversy as an advertising model is the enormous risk of losing customers. It can be easier to advertise using controversy by offending at least some portion of the target audience. This is why it can fail more often than to work, and in most cases, it is not worth taking the risk. Any attention is good attention, but not all attention creates sales. A decrease in sales and having customers angry and provoked and never going to purchase the brand again is most likely to occur. Usually, lost customers are challenging to get back because the trust between a consumer and a brand is gone. (Maff, 2018) Diversity can bring many difficulties if an organization wants to advertise through controversy. For example, the United States is one of the continents with consid- erable diversity. It cuts down the possibility of implementing a controversial mar- keting technique without being shot down by one group of people. (Agrawal, 2016)
6 CONSUMER MEASUREMENTS 6.1 Response to controversial advertising
The basis of the proposed model for responses to controversial advertising is Ros- siter and Percy's Buyer Response Steps (Rossiter and Percy, 1997). It was chosen as the basis of the model, as it represents the primary sequence that all marketing communications would undertake concerning the prospective buyer, i.e., expo- sure - processing - communication effects - action. The proposed model is in Figure 8.
Figure 8. Proposed response model for controversial advertising (Waller, 2006) Figure 8 above illustrates the process of consumer response to controversial ad- vertising. First, the process starts with consumer exposure to advertisements via several media platforms. The exposure includes the advertised product types and the execution types used in the advertisement. After processing, the prospective buyer moves to the content processing step, which may create various personal feelings towards the advertisements. According to Wilson and West (1981), the emotional response might be "distaste, disgust, offense, or outrage." However, a
controversial advertisement may bring positive reactions, such as attention, asso- ciation, and liking.
Regarding the communication effects, the emotions that came from the response to the advertisement may produce a long-lasting response about a brand. The pos- itive effects are the awareness of the brand with a positive attitude, while the ad- verse effects are the awareness of the brand with a negative attitude. Finally, the action taken by a prospective buyer to a controversial advertisement can vary widely. The action, therefore, may be divided into positive and adverse due to per- sonal preferences. (Waller, 2006)
This model illustrates the positive and negative responses to controversial adver- tising by identifying the potential responses from the prospective buyer at each step of the process. Therefore, when a buyer is exposed to a controversial adver- tisement, a potential positive response may lead to a position reaction. In contrast, a negative response may negatively affect the offensive advertisement.
7 RESEARCH METHODOLOGY
7.1 Research process
Research is a diligent search, intellectual inquiry or investigation, or experimenta- tion aimed at discovering new facts and findings or concerned with any subject of inquiry concerning the collection of information, interpretation of facts, revision of existing theories or laws in the light of new facts or practical ideas. (Adams et al., 2014)
The research sequence includes four main stages. First is situation exploration, which is finding a specific problem for the research. After that, the formal research plan is operated, which refers to developing the research design. The next step is data collection, when data are collected by using appropriate methods of data col- lection. The final step is to analyze and interpret the results. (Krishnaswami &
Satyaprasad, 2010)
The thesis process started by preparing the topics and researching available prob- lems. The achievement is to have the final thesis with a business-relevant topic.
The research question focuses on why a famous brand like Nike uses controversial advertising to divide consumers' opinions. How does this campaign affect Nike's reputation and revenues? Is it an effective method or a gambling move? Will the subsequent effects satisfy the brand's reputation after using controversy?
To answer the above questions of the thesis, the author goes to all the theories and information of marketing, consumer behavior, branding, advertising, and con- sumer measurement. These theories consist of several models and figures, such as Maslow's hierarchy, buyer behavior models, or proposed response model for controversial marketing, which help explain the theories.
7.2 Research methods
The approaches to the research can be identified by analyzing the different re- search, which are, for example, analytical study, applied research, and pure re- search. The analytical study requires setting the hypothesis to test the same by considering the elements connected with the issues, which will be critical and pre- cise. Meanwhile, applied research focuses on finding a solution to the immediate problem faced by society. The last type, pure research, aims to find some things for society that are more popular in science and technology. (Krishnaswami &
Satyaprasad, 2010)
Data collecting refers to the process of looking for answers to research inquiries.
Data are facts and other relevant resources, past and present, that serve as the foundation for research and analysis. Data plays a critical part in the research's Liability, and the relevance, adequacy, and reliability determine the research's quality. (Krishnaswami & Satyaprasad, 2010)
There are two main methods for collecting data, which are qualitative and quanti- tative. First, qualitative research may produce useful, revelatory, and rich data.
Depending on the nature of the research endeavor, they can be utilized alone or in conjunction with other research tools. Interviews, for example, can be used to explain and understand quantitative research findings or to give exploratory data later refined by quantitative research. (O'Gorman & MacIntosh, 2014) MacIntosh and Bonnet (2007, p. 321) note, "Qualitative research is sometimes styled as the poor cousin of 'real science'…." Second, quantitative research is concerned with identifying and explaining the existing reality. The analysis will be based on numer- ical, percentages, and monetary terms. (Krishnaswami & Satyaprasad, 2010) Sev- eral popular quantitative tools are surveys and questionnaires designed to collect and statistically analyze data.
Collecting data has two main sources, which are known as primary and secondary data. Primary data was created specifically for the objectives of a research project.
There are several primary data types, such as questionnaires, surveys, and obser- vations. On the other hand, secondary data is the label used to describe previously available data for a researcher to collect and analyze. (O'Gorman & MacIntosh, 2014)
Analytical research was used to generate the data and information for this thesis.
So, the data is already available, allowing the author to examine it and obtain the desired results. These analyses take a critical stance in order to obtain the desired results. In addition to analytical research, qualitative research is utilized, which has the same type of definition. Qualitative research aims to discover facts and build theories, allowing the author to assess the material and come to his conclusions.
The information was acquired from various literature sources, including study books and biographies, but in addition to the book sources, various articles and websites were used. The author also examined many charts and figures to de- scribe various arguments and hypotheses with limited quantitative research meth- ods.
7.3 Case study explanation
A case study investigates the above to answer specific research questions. It seeks various types of evidence present in the case setting and must be abstracted and collated to provide the best responses to the research questions. No one kind or source of evidence is likely to be sufficient on its own. Using multiple evidence sources, each with its strengths and drawbacks, is an essential element of case study research. (Gillham, 2000)
The chosen case study in the thesis is Nike Inc due to several controversial mar- keting campaigns it had in the past. The case study's target is to determine how Nike uses controversy to boost revenues and how controversial marketing affects Nike's reputation. A company introduction will go through Nike's history, how eve- rything started, and why it has become well-known today. The case study also in- cludes several controversial marketing campaigns Nike had but focuses more on
the recent "Just do it" campaigns in 2018, which are more popular and easily ac- cessed.
7.4 Liability and validity of the research
Liability and validity are two significant elements affecting the finding's results.
Validation of the research could be more robust because the author uses only sec- ondary sources, which need to be updated. Other authors previously collected this data, which may create adverse opinions. The limitation of secondary sources is that they need to be more precise as wanted. Another limitation of this research is that the author only used one case study besides several cases, giving only one output.
8 RESEARCH RESULTS
8.1 Nike
8.1.1 Company history and introduction
The story of Nike begins with Bill Bowerman and Phil Knight. Bill Bowerman was a running coach at the University of Oregon who reconnected with a former stu- dent, Phil Knight, after a brief time at Stanford. Bowerman was intrigued by opti- mizing sports footwear and running shoes for performance, so he began experi- menting with several models after learning some tactics and ideas from a local cobbler. Blue Ribbon Sports, a footwear company from Oregon that for many years operated out of the back of a car at track meetings, was founded on January 25th, 1964. The company originated as a distributor of imported shoes, namely Onitsuka Tiger. Knight was blown away by the quality of Onitsuka Co.'s trainers, which he saw as fresh air in the German-dominated sneaker business. While the rest of the world was debating between Puma and Adidas, Phil Knight looked to Onitsuka Tiger and Japan for a new, high-end running shoe. After a few years as Onitsuka's sole distributor in the US, Knight and Bowerman began to consider how they could do things differently. The firms grew apart as Blue Ribbon Sports be- came Nike in 1971, and the "swoosh" was created. Bowerman had always de- signed prototype trainers for his athletes. After dismantling pairs of Onitsuka Tiger running shoes and imagining how he would do things differently, he began work- ing on the first Nike sneaker. (Strong, 2021)
Nike engaged Josh Brown and Partners as its first advertising agency in 1976. The following year, the agency created Nike's first "brand ad," "There is no finish line,"
which featured no Nike product. Nike had a 50-percent market share in the US athletic shoe market by 1980, and the business went public in December of that year. Since then, the company has only grown, aided in part by several intelligent
ad campaigns, most notably the 1988 "Just Do It" ad campaign (supposedly in- spired by American murderer Gary Gilmore's last words before the firing squad,
"Let's do it.") (Meyer, 2019)
One of the most significant contracts Nike ever had, which played an essential role in bringing Nike into the world, was the contract with Michael Jordan in 1984. Back in the day, a struggling Nike decided to sign a five-year deal with a 21-year-old rookie Michael Jordan, who at that time was a sneaker-free agent. Until today, the Air Jordan 1 is labeled as the shoe which started a fashion revolution. The pair was black and red when introduced, which was banned by the league due to being against the uniform regulation. However, the Chicago Bulls legend continued wearing his shoes whenever he played at the Chicago Stadium. Nike paid $5000 per game so Jordan could wear that pair, an early controversial marketing cam- paign the brand did to bring the products closer to the audiences. The shoes were then reported to earn the brand $126 million, although Nike only predicted to make $3 million. Rapper Nas compared the shoe to a lightsaber. He said that eve- rybody wanted the shoe to be like Mike and was more than a status symbol.
(Pawar, 2020)
Nike is now globally dominating the athletic footwear market as a top athletic ap- parel and footwear manufacturer. The brand shows that the road to success can be messy, dangerous, and chaotic, full of mistakes, endless adversity, and sacri- fices. (Knight, 2016)
8.2 Nike’s marketing strategy
Nike's marketing tactic leverages the four Ps—product, price, promotion, and place. While these elements are fundamental in every marketing strategy, Nike understands how to gain an advantage. The brand uses a good combination of these components to lure more potential leads. The price, Nike products usually come at high prices. However, the brand knows to position its products by empha- sizing the benefits so that customers will be satisfied, which is essential for them.
Next, Nike products are high-quality and aesthetically unique compared to other footwear brands. Moreover, Nike takes pride in maintaining this reputation re- garding its footwear.
Regarding promotion, Nike's marketing efforts are carefully created to target a particular group, even with varying demographics and psychographics. Finally, the brand also leverages third-party resellers and retailers to skyrocket sales. How- ever, the brand diversifies its selling channels, such as online stores and physical locations. (Garces, 2022)
8.3 Nike’s targeting and segmentation
Figure 9. Nike's segmentation, targeting, and positioning (edrawmind.com) 8.3.1 Targeting
Nike's target market is global, and the Nike age range ranges from early adoles- cence to middle age. While the company has a significant focus on marketing to athletes and sports lovers, Nike's approach has recently broadened to reach nu- merous specific market segments, including women, young athletes, and runners.
Nike creates shoes for men in the following categories: football, basketball, run- ning, lifestyle, gym and training, American football, tennis, golf, crickets, baseball,
and skateboarding. Nike's women's shoe line includes yoga shoes. Meanwhile, the company's kids' classification is aimed at young athletes. Aside from delivering great shoes, Nike offers a variety of colors for its products since the firm believes that comfort and the physical appearance of the products can provide customers with happiness and pleasure. (EDrawMind, n.d.)
8.3.2 Segmentation
Nike divides their customers into sub-segments based on their needs, de- mographics, priorities, similar interests, and behavioral and psychographic char- acteristics. The process of selecting segments will differ from one company to the next. Nike divides their market into four categories: geographic, demographic, psychographic, and behavioral. (EDrawMind, n.d.)
For Nike's demographic segmentation, the company considered age groups, gen- der, and the customer's financial situation. Nike has categorized their items into gender and age groups ranging from 15 to 55 years old. The company also sorts its products into men, women, and kids. The company's special offers and discounts sometimes fall on special occasions to encourage consumers to buy their products.
It is Nike's way to have customers buy products that they could not afford at the beginning. (EDrawMind, n.d.)
Nike's geographic segmentation strategy includes the presence of physical stores in various parts of the world. This chapter recognizes that each country's lifestyle patterns and cultures vary. The company introduced a wide variety of products for different countries that satisfy the customers' demands. Nike conducts multiple promotional campaigns in the US, Europe, Australia, Asia, and Africa since sports vary in regions and cities. (EDrawMind, n.d.)
Nike's psychographic segmentation focuses on providing its clients with a variety of products that correspond to their requirements and interests. This level of Nike market segmentation allows Nike to analyze each customer's preferences.
(EDrawMind, n.d.)
Finally, Nike's behavioral segmentation benefits customers through clothing, com- fortable footwear, and essential sports equipment. Nike also creates a series of product versions to satisfy each customer's preferences. Nike makes its customers feel like athletes if they use Nike products. It also builds customer engagement by delivering distinct quality and innovative products. More importantly, the brand allows its target market to share its experiences with other people via social media and websites. It will significantly affect consumers' purchasing manners.
(EDrawMind, n.d.)
8.4 Nike’s marketing mix
Nike's marketing mix (4Ps) defines the profitability and development of the ath- letic footwear, apparel, and equipment business. A brand's marketing mix refers to the strategies applied to operate the marketing plan, focusing on products, place, promotion, and price. Nike has a blended marketing mix for both athletic and leisure activities. For instance, the brand focuses primarily on professional athletes' shoes, while these products are also marketed for global customers based on Nike's mission and vision statements. (Gregory, 2022)
About the products factor, shoes are the most popular products of Nike, and the company tries to utilize these products for a wide variety of sports. For instance, Nike basketball shoes are not only used by basketball players but also by volleyball players. Nike also has product lines for apparel, equipment, and accessories. The brand broadens its product mix to satisfy its target markets and segmentation based on specific market characteristics. (Gregory, 2022)
Next, regarding place elements, this variable optimizes Nike's market reach.
Global consumers now easily access Nike products via Nike stores, online web- sites, and retail outlets. Moreover, Nike products are also easily witnessed in other retail stores. Nike retail outlets help the company have complete control of the retail sales process. On the other hand, Nike has limited control over the sales and distribution at other retail stores. (Gregory, 2022)
The promotion element involves Nike's tactics to communicate with its target mar- ket. Advertising is one of the significant contributors to Nike's promotional activi- ties, which relies on the company's famous professional athletes, such as Cristiano Ronaldo and Rafael Nadal, and celebrities like Drake and Billie Eilish. In addition, Nike promotes their products via college and high school sports organizations, which have many potential customers. Moreover, Nike periodically delivers dis- counts to attract customers and generate more sales. (Gregory, 2022)
Finally, Nike applies the value-based pricing strategy and premium pricing strategy in its business. In the value-based pricing strategy, Nike considers consumer per- ception of its product's value. Perceived value establishes the maximum pricing that consumers are willing to pay for the company's sports shoes, gear, and equip- ment in the context of the marketing mix. The premium pricing strategy, on the other hand, utilizes high prices based on a premium branding strategy that identi- fies Nike products as superior in quality and value to rival products. Nike success- fully uses its pricing strategies to maximize profits while stressing high value in promoting its products and brands. (Gregory, 2022)
8.5 Nike’s consumer behavior
The psychological factor is Nike's most influencing factor in approaching their cus- tomers. Nike's "swoosh" logo, its name meaning, and the "Just Do It" slogan bring inspiration and motivation to its consumers. Moreover, Nike has a lot of high-pro- file athletes in every sports field, such as Cristiano Ronaldo, Rafael Nadal, and LeB- ron James, who bring sentimental value to their fans. The fans, therefore, want to wear their idols' shoes to bring them a sense of winning. (Ugur, 2013)
8.6 Nike brand
Figure 10. Nike CBBE model
Nike is the leader in the footwear industry and will continue standing on top for the next few years with the current situation. The above Nike CBBE model illus- trates all the factors which help the brand connect with its consumers, increase profit margins, develop brand loyalty and improve brand equity. Nike knows how to use its competitive advantage, which brings its recognition.
Nike positions its brand as a market leader in the sports equipment industry. Nike's name meaning, its swoosh logo, its "Just Do It" slogan, and several product pro- motions with famous athletes convince and inspire its consumers with their achievements. The brand uses its athletes themselves to bring a meaningful and
unique feel to the products., making the firm exceptional from its competition.
(EDrawMind, n.d.)
8.7 Nike’s advertising strategies
Nike's advertising strategy follows the AIDA model, which finds the best approach to reach its target consumers. In the first step, the products worn by famous play- ers and celebrities caught consumers' attention. After seeing them, Nike's poten- tial leads may be interested in purchasing the products because they want the specific products their idols are wearing. Nike also creates the "Notification" but- ton on Nike and SNKRS apps, which may bring the fear of missing out (FOMO) to their leads, so they may desire to buy them as soon as the products are released.
Finally, since the leads become the customers, they take action to purchase prod- ucts.
Figure 11. The AIDA model (digitalstrategyone.com)
8.8 Controversial advertising of Nike
Nike, during its history, has released several controversial advertising campaigns aimed at a specific consumer group. Therefore, one of the latest advertising cam- paigns is taken to analyze how controversial marketing affects Nike's reputation and profit.
8.8.1 Overview
Figure 12. "Just Do It" campaign featuring NFL player Colin Kaepernick (The Guardian, 2018)
In 2018, Nike launched a new advertising campaign that was based on a solid po- litical conflict capable of tearing apart the United States. Former NFL player Colin Kaepernick was chosen as the lead endorser of the "Just Do It" campaign. Kaeper- nick, also known as a civil rights activist, took a knee during an NFL game's national anthem in 2016 to stand against police killings of African Americans and other is- sues. (The Guardian, 2018). At that moment, the USA was divided due to increas- ing racism, social injustice, and police brutality. In addition, in the middle of the
"Black Lives Matter" era, when African Americans were being attacked and dis- criminated against across the country, Nike showed the brand's support for black communities with the campaign strategy.
Moreover, he posted a campaign photo on his Instagram page. The photo is black and white with his face and a quote, "Believe in something. Even if it means sacri- ficing everything". Additionally, an advertisement named "Nike Dream Crazy" fea- turing Nike athletes encourages viewers to chase after their dreams, although their disadvantages may hinder their success. With Kaepernick as a lead endorser, the campaign quickly became a global news story and political firestorm in the United States (Balkam, 2020).
8.8.2 Controversial advertising strategy
Colin Kaepernick faced widespread criticism following his kneeling during the na- tional anthem. A poll in 2016 named him as the most disliked player in the NFL.
Among African Americans, 42 percent liked the 49ers quarterback "a lot," while only 2 percent disliked him "a lot." Meanwhile, 37 percent of white respondents said they dislike him "a lot." (Yomtov, 2016). Another survey from YouGovAmerica in 2018 showed that 46 percent of Nike consumers had a favorable view of Kaeper- nick while 23 percent did not. The survey stated that most Nike customers support social activism and the push for reform regarding racial inequality and police bru- tality. (Marzilli, 2018) As a result, by using Kaepernick as the campaign's face, Nike hoped to reach its target audience and influence public opinion about its brand.
However, according to another research, 53 percent of Americans oppose kneel- ing during the national anthem because they believe it disrespects the flag and the country. (Nichols, 2021) Therefore, this advertising campaign may become a polit- ical and social risk for Nike after releasing to the public.
