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Consumer behaviour and attitudes towards nike regarding the tiger woods personal scandal – has it effective nikes brand image?

Introduction

The author has always had an interest in the lives of celebrities and their behaviour, the proposal of investigating celebrities behavioural impacts intrigued her and this was the main inspiration for the research to be carried out. This research will determine if the behaviour of a celebrity in their personal life that is endorsing a product has an effect on the brand image. This research will focus primarily on the Tiger Woods Phenomenon.

In today’s current markets there are so many competitors and product replacements that a product alone is solely not enough to be the deciding factor in a purchasing decision from a consumer (REFERNCE). Many consumers are looking at other factors that will influence their decision on a certain product. One of the factors is the Brand. The building of a strong brand is one way in which a company can develop and sustain an advantage over its competitors, this in turn will maintain or increase its sales or market share. Hankinson & Cowking (1993)

Tiger Woods is a professional golfing champion he is also an extremely lucrative brand and, his brand has been very profitable to him through means of sponsorship, however what happens to the brand image when a celebrity endorser is hit with personal issues that affects their image.

There has been a lots of research carried out on the subject of celebrity endorsements, but since the internal and external environment of a business is changing all the time and also the customers are becoming increasingly savvy and smarter when deciding on which product to choose. Consumers make knowledgeable selection on what brand to purchase and it would be fascinating to see whether a consumer would change the opinion of the brand if the brand is endorsed by a celebrity that they identify themselves with or if the behaviour of the celebrity endorser will have an impact on the consumer’s perception of the brand.

Background

Tiger Woods is currently 7th in the world golfing rankings previously dropping from 1st, he is one of the most successful golfers of all time. His image and reputation made him one of the most powerful marketing tools for a number of organisations that included Nike, American Express, Gillette, Accenture, Tag Heuer, Buick, EA Sports and Gatorade. This sponsorship deals earned Tiger Woods xxxxx , however this all changed in November 2009 when news broke that Tiger Woods had participated in infidelity to his wife. This was just the start of ‘The Tiger Woods’ scandal, the scandal that would go on to ruin Tiger Woods reputation and his squeaky clean public image. The story alleged that Tiger had been having affairs with a number of women over a period of time. (REFERNCE).

Public opinion of Tiger Woods changed; Brands that sponsored Tiger were under a lot of pressure on how to react. Tiger knew that this story and the media backlash that he had received could potential damage his career forever. On 1st December 2009 Tiger Woods public apologised to his family and his fans in a statement released on his website, however some of the damage was already done on his public image and brands had decided to drop him straight away such as Accenture and Gatorade and other companies scaled down there work with him like Gillette and Tag Heuer. Nike however, decided to keep their sponsorship deal in full force and stood by Tiger Woods.

A celebrity being used to endorse products and services is not a new concept. Celebrities have been used to advertise and promote products for more than 50 years (ref). The influence that celebrities can have on brands can be quite strong if the celebrity and the brand match Elliot and Percy (2007).

Aim and Objectives of the Research

From the research the author intends to examine what happens with customer’s views and opinions of an endorsed brand when the celebrity’s behaviour causes negative press. In particular to determine whether having Tiger Woods endorsing Nike affected the brand image and the consumer’s perception of Nike when he had an affair and his personal life was made public in the media and did it have a knock on effect on the consumer buyer behaviour towards Nike.

The research will identify consumer’s views and opinions on Tiger Woods and whether his behaviour has changed their perception of him, it will also assess whether Tiger’s behaviour had an effect on the Nike brand that he is endorsing and does Tiger Woods portray what Nike wants its image to be perceived as. An evaluation of the findings will determine whether or not Tiger Woods behaviour has affected Nike and if it has, then how and if it has not then what might be the explanation for this.

The conceptual framework used

The study uses direct research methods based on primary data collection through questionnaires and secondary research from books and journals. The review of the literature will cover the aspect of brand, branding equity, brand awareness, brand image and brand loyalty, endorsements, celebrity advertising and the consumer buying behaviour process .Using the author’s findings a conclusion will be made regarding the effect of Tiger Woods behaviour on the Nike Brand Image.

Literature Review

What is a Brand

Kapferer (2008) defines brand a set of associations that add to the perceived value of a product or service. A brand is an intangible asset to a business, and it is nowadays what businesses focus on to differentiate themselves from their competitors. Wyatt (2008) claims that intangible assets such as brands, patents and workforce are essential determinants of a company’s worth and over the year’s accountants have been criticised for not consistently recognising a brand name Kaplan & Norton (2007). King (1991) extends this argument buy stating that “A product is something that is made in a factory; a brand is something that is brought by a customer. A product can be copied by a competitor; a brand is unique. A product can be quickly outdated; a successful brand is timeless”

Brand Equity

Akaer et al (1991) explains that there is much confusion of brand equity and brand image as however there is one main distinction between the two , brand equity is deals with the value of the brand beyond the physical aspects. Akaer et al (1991) goes on to say that the name awareness , loyal customers , perceived quality and associations that are linked to the brand can add or subtract value to the product or service being offered. Yoo and Donthu() take brand equity a step further suggesting that brand equity is the consumer’s different response between a focal brand and an unbranded product when both have the same level of the marketing stimuli and product attributes.

Pride & Ferell() agree with this explaining that to consumers the brand name is as fundamental as the product itself. Consumers will buy products or services just because of the brand name and the recognition that they will get for having that brand. The brand creates the value for the product which in turn makes it superior to its competitors. However Elliott & Percy (2007) believe that there is more to brand equity than just the consumer aspect and the perceived value of the brand, there is the financial perspective of brand equity which considers the importance of the brands and the financial impact that this has on the company. If the perceived value of the brand is good then a consumer will choose this brand over competitors resulting in more profit for the company. The brand equity is however down to the customer’s perceived value of the brand, the attributes of the brand, their experience of the brand and their knowledge of the brand.

Fig 1.0 -Elliott & Percy (2007) How Strong Brands generate greater profitability

Aaker () goes on to explain that the brand loyalty of the customer base is often the core of a brands equity. The more the customer continues to purchase the brand and affiliate themselves with the brand over competitors who may have better products the more brand loyal they become. Brand loyalty is defined as buying the same brand repetitively because of a strong preference for it .Hoyer and Macinnis(2009)

Brand Knowledge

Brand awareness and brand image are two factors to consider of brand knowledge. The image of the brand is what draws consumers in to purchasing the product or service and the awareness creates the knowledge they consumer will have on the brand. The customers relationship with the brand helps identify the brand image Keller et al (2008). It is interesting to note that Sen (1999) agrees with Keller et al explaining that consumer’s awareness of a brand name is the first critical stage in the development of brand knowledge.

Brand Awareness

Aaker () defines brand awareness as the ability of potential buyer to recognise or recall that a brand is a member of a certain product category.Aaker () goes on to say that brand awareness involves a continuum ranging from an uncertain feeling that the brand is recognised to a belief that is the only one in the product class.Aaker () feels that this variety can be represented by four different levels of brand awareness.

Aaker () The awareness Pyramid

These levels of brand awareness will determine how effective branding is for the company. De Pelsmacker et al (2007) explains that the stronger the awareness of the brand is in the mind of a consumer, the greater the possibility that he or she will buy it and then in turn will continue to purchase the product again and again which will create a loyalty to the brand. Brand awareness is key to the decision making process of the consumer. The awareness of the brand highlight the brand image and how it can attract a consumer De Pelsmacker et al (2007). The image is the first thing a consumer notices about a brand whether it be the actual visible element or the intangible assets of the brand and the brand reputation. The awareness of the brand will play a major part the in the deision making process of the consumer De Pelsmacker et al (2007). It enables consumers the gain knowledge of the brand and the brand associations and when the decision is being made by the consumers the brand awareness that they have of a particular brand could be an factor that they consider as they do not know of the competitors Keller et al (2008).

The continued awareness of a brand is increasingly important for a brand as this can ensure familiarity with the brand for the consumers, which will in turn create comfortability and recognition. Keller et al (2008) suggest that repetitive marketing is key to the awareness of the brand. Aaker () continues the research on brand awareness by suggesting the brand recall and brand recognition are factors that implement brand awareness. Brand recognition is defined as when a consumer is able to identify a brand if it’s presented to them by a list of hints and cues Shimp (). Shimp () goes on to say that brand recall is when a consumer can rememeber a brand from memory with no reminders , this is where marketers what their brands to be. They what consumers to just remember their brand straightway for example when you are asked about mp3 players and the first thing you think of is an Apple Ipod showing that you associate Apple Ipods with mp3 players predominantly.

However Aaker() argues there is limitations to brand awareness as a brand asset can not by itself create sales for a company especially for a new product . This suggests that brand awareness is key to creating a advantage other competitors to consumers however it is not the only factor that will impact the consumer purchasing decision.

Brand Image

Brand image is another component of brand knowledge. Keller et al (2008) defines brand image as the associations that people have towards a brand. The power of the brand relies on the positivity and preference of these associations as well as with the consumer’s perception in the consumers’ mind. The image of the brand is therefore of extreme importance to the company as they have to ensure that the portrayed image visible or intangible elements match the characteristic that the consumer wants from the brand.

Brand Personality

The brand personality consists of a unique combination of functional attributes and symbolic values. Functional attributes consisting of the tangible product offering and symbolic values are the intangible properties such as ‘fun’ to use. Plummer () argues that for many product classes brand personality is a key element. Evans et al () suggests that just as humans have personality traits so do brands. The traits and characteristics of a brand can help consumers feel an affiliation with the brand, in which the consumer can feel like they trust the brand more and will continue to use the brand over competitors creating brand loyalty Aaker ().

Aaker () suggest that brand personality consists of five dimensions

Figure 2 – Aaker () Brand personality factors

The five core dimensions being sincerity, excitement, competence, sophistication and ruggedness. Associating these factors to a brand for a consumer can create the brand personality. Consumers will try to match their personality to the brand unintentionally Wee (2004)

However Hankinson and Cowking ()argue that for brands to focus to a greater extent on the symbolic values rather than on its functional attributes suggestion that these in turn will have a more effective impact on the brand and the personality of the brand. Kapferer (2008) recommends that for a brand the simplest way of creating the personality of the brand is by endorsing the brand with a famous person. However this can only be achieved if the famous person’s characteristics match the characteristics of the brand so that consumers will feel the connection and believe the celebrity when they say that this the most amazing product ever.

Endorsements

An endorsement is defined by xx () as

Celebrity endorsements

According to Friedman & Friedman, () a celebrity endorser is an individual who is known by the public for his or her achievements in areas other than that of the product class endorsed. The celebrity is using their position to promote and advertise a product for a fee. Celebrity branding is a type of advertising in which celebrities’ uses their status in society to promote a product, service or charity. Celebrity branding can take several different forms, from a celebrity simply appearing in advertisements for a product, service or charity to a celebrity attending PR events and using their names as part of the brand. Hollensen (2007). Kim and Na (2007) explain that celebrity endorsement is frequently used in advertisements to enhance the effectiveness of persuasive communication.

Celebrity endorsements can have such an impact on a brand. According to Kotler et al (2009) a celebrity endorsement can enhance both the brand attitudes and the company image. If the correct effect is made from the endorsement it can increase sales and profits for a company .However the credibility of the celebrity is also essential in the endorsement affect. The celebrity needs to be believed by the consumer. This leads to the match up hypothesis and the meaning transfer model.

There are many advantages to celebrity endorsement however there are some factors that can influence the effectiveness of the endorsement. For an endorsement to be successful the correct celebrity is to be use. Companies will use the Match up Hypothesis to ensure that the celebrity they choose is going to get the desired effect. Hoyer & Macinns () defines the Match up Hypothesis as the idea that the source must be appropriate for the product or service. The celebrity that is endorsing the product or service has the characteristics and qualities that the company wish to portray and it also suggests the celebrity needs to have an amount of belief in what they are endorsing. Kamins (1990) suggests that endorsers are more effective when there is a “fit” between the endorser and the endorsed product. Most of the empirical work on the match-up hypothesis has focused on the physical attractiveness of the endorser. The conceptual argument is that attractive celebrities are more effective endorsers for products which are used to enhance one’s attractiveness lead to higher brand attitude and purchase intentions Till & Busler (2000 p1-p13)

For the endorser to effectively convey the brand they have to be seen as a believable source for the product or service. Pringle () extenuates this by explaining that when the audience see that there isn’t any real connection between the celebrity and product/brand they naturally (and correctly) presume that the celebrity is only doing it for the money.

However Sengupta (2005) also argues that if there is a public scandal regarding the celebrity or if the celebrity has multiple endorsements it will have a negative impact on the brand. White et al (2009 pg 323)agree with sengupta argument but suggesting that it is crucial that companies be aware of the risks associated with using celebrities to endorse their stores and products. White et al (2009 pg324) go on to state that previous results provide tentative support for the commonly held belief that a decline in the celebrity’s image can impact the image of the brand, it is important that retailers carefully choose an endorser who currently has a good image and will likely be able to uphold this image in the future.

It is believed by Roderstein (2005) that celebrity endorsers could strenghten the communication message and are a direct determinant of the brand image or brand personality.process of the communication and the brand-equity management. Clear Objectives ought to be determined in order to observe the effectiveness of the endorsement deal. Roderstein (2005). The author feels that If celebrity endorsements are carried out effectively then the positive outcome for the brand could be enormous , the key to celebrity endorsement is to match the personality and characteristics of the brand to the personality and characteristics of the endorser so it is believable to the consumers. The brand also has to ensure that the celebrity matches the traits and characteristics that the brand wishes to portray to the public. There can be a negative impact on the brand if this is not measured correctly.

Meaning Transfer Model

McCrackens 1989 meaning transfer model suggest that celebrities’ effectiveness as endorsers stems from the cultural meanings with which they are endowed. The model shows how meanings pass from celebrity to product and from product to consumer .McCracken (1989)

McCrackens (1989) Meaning Transfer Model

The culture and chacarestistics of the endorsement must represent the value of the product or brand.

However there are some negatives to celebrity endorsements. In a society where we are becoming increasilying obsessed with celebrities, their lives are becoming under intense scrutiny in the media for us all to see. Kotler et al (2009). The cost of celebrity endorsement can also be an issue for brands and companies () it is very expensive to hire a celebrity to endorse a product

Consumer Buyer Behaviour

Powerful brands create meaningful images in the minds of consumers (Keller, 1993), the brand is a very powerful tool when it comes to consumer buyer behaviour at the decision making process. When marketing a product the company needs to be aware of the process a consumer goes through when deciding what product to buy. A consumer is faced with many different questions and decision when choosing a product. A company has to take all different aspects of a consumers decision making in to account when marketing a product.

According to Masterson & Pickton Buyer behavior is how a consumer purchases a product using a variety of different stages in making a decision (Masterson & Pickton).

When choosing a product the consumer is faced with lots of different decisions to make sure they buy the right product for themselves.

Using Engel, Blackwell & Miniard process of the buyers decision-making shows us how a consumer may decide on the product they want. The model is split in to five sections the first being the need or problem. The buyer knows that there is a difference from the current state to the actual state (Masterson & Pickton) and therefore it needs to be satisfied. This could be influenced by internal or external factors. The buyer will continue to decide what to buy by searching and discovering the different options available to them. This is called information searching. The buyer will then evaluate the different options available to them and which they feel is the best, the consumer evaluates the product on their individual need and individual circumstances. The factors that could attribute to the evaluating of the products are the cost, reliability and service (Masterson & Pickton). The buyer then makes the decision. This decision could be made with the influences of others or by the current situation for example a consumer is hungry and would like some chips to feel them up but they do not have enough money on them to buy the chips so they have to settle for a sausage instead. After the consumer has purchased the product, they will then evaluate their decision to see if they feel they have made the right one. If there are happy with their decision they will buy the product again if they are disappointed they will not reuse the product.

Figure – Engel, Blackwell & Miniard () process of the buyers decision-making

Nike

Nike and Tiger Woods

Nike Brand Image

Methodology

Research methods

A number of factors were assessed when deciding on which research strategies to use. The methods involved in the research have different strengths and weaknesses that need to be considered when managing the intention of the research. The choice to centre the research on brands, endorsements and consumer behaviour was made at the beginning of the study. The topic of a celebrity endorser’s behaviour is often a vocal point in the tabloids every day. The image that the media portrait of these celebrities after a scandal has emerged is enough to damage their reputation for a long while if not for ever. This behaviour has led a number of companies to drop their celebrities from representing and promoting the brand as to dissociate with their behaviour for example Wayne Rooney recently caused a major media backlash when he swore on live TV, not only was he punished by the Football Association but by one of the companies he endorsers Coca-Cola because of his recent behaviour. (REFERNCE) and this is why the research on Tiger Woods has been chosen by the author. As mentioned previously Nike decided to keep Tiger Woods as a celebrity endorser for their brand even though the media was determining to ruin him and his reputation. Nike was keen to express that they felt that Tiger’s behaviour would not have an effect on their company and its image as explained by Phil Knight the co-founder of Nike who said that the scandal surrounding Tiger Woods was “part of game” in endorsement deals and these indiscretions are a ‘minor blip’ for Tiger Woods Leonard (2009) . However the research carried out by this author is to determine whether that is the truth and that consumers separated the two. Did the opinions, views and feeling of consumers on the subject of Tiger Woods behaviour affect the Nike brand When the findings are analysed it will hopefully present important information for brands and endorsements and if it the behaviour of a celebrity endorsing a product has negative recogonisation on the image and reputation of the brand and is it worth it for the brand to keep the celebrity or drop them. The research will conclude whether Nike made the right decision or not.

Secondary Research

The literature used in this investigation has been composed through extensive reading in and around the topics mentioned above. Keywords were searched for which included branding, brand image, celebrity endorsers and consumer behaviour. Articles were sourced from reputable journals such as credo, Business Source Premier and Sage to guarantee a high degree of creditable findings for the literature review. As the main focus of the research is on Tiger Woods behaviour and the effect it has had on the brand Nike which was main focus of the media at the time of the scandal, a number of newspaper articles, magazines and blogs have enabled the researcher to gain more knowledge on the situation.

The secondary research will also enable the researcher to gain more information on the Nike brand and company. The research will be obtained from creditable sources such as the company profile of Nike from datamonitor, information from their website, books and journals on Nike. This research will provide the researcher with the opportunity of comparing the findings of the primary research to the aspects of the Nike Company that they wish to portray. These two forms of research will enable the researcher to identify whether Tiger Woods behaviour is representative of Nikes brand image and if it’s not then why have they kept him on to endorse their products.

The research will also try to obtain whether there has been a change in views and opinions from the time of the scandal to the present day. Did consumers of Nike feel negative towards Nike decision then but have now forgotten about it and continued to purchase from them and has time been a healer for Nike and Tiger Woods or are consumers impacted just the same now as they were back in November 2009.

Data Collection Method

The aims and objective of this investigation is to gain an insight in to what consumers feel and how they respond to a situation.

The epistemology considered appropriate for this study of views and opinions is

The approach to this research is a deductive approach as

As the main objective of this investigation is to gather the views and opinions of people the primary research was carried out by means of a questionnaire xxxx () defines a questionnaire as a techniques of data collection in which each person is asked to respond to the same set of questions in a predetermined order. Participants were asked to fill in a questionnaire that consisted of xx questions both closed and open questions. The questionnaire is intended to explore how people’s awareness of Tiger Woods behaviour affects their opinion of one of the world’s leading sports brand Nike. The aim is to indentify if consumers opinion has changed since the scandal in his life.It was identified in the proposal to this research that Questionnaires would be the best method for data collection as questionnaires are a highly structured method of data collection. Sapsford and Judd (1996).As mentioned previously the aim of this research is to find out people’s views and opinions on the topic so by using a questionnaire the data can be collected from a larger number of participants and evaluated effectively. This enables the researcher a more accurate view on the findings as the sample of the population used is more realistic. This method was also chosen due to the price, as this was the cheapest way to obtain the data from larger audience than any other method.

Limitations to the research method

However there are limitations and drawbacks to this method that the researcher had to overcome to ensure all data is correct. The response rate to a questionnaire can be very low Flick (2011) to ensure that this is not the case the researcher opted for the delivery and collection method of questionnaire administration Saunders et al (2009). The researcher will try to ensure that the questionnaire was completed there and then so that the response rate was high.

The questions will firstly identify the participant’s knowledge of the Nike brand and company. Then questions will then go on to assess what consumers feel about Nike and the company Image. The third stage will recognise whether the participant is aware of Tiger Woods, the scandal and his relationship with Nike. The final stage will ask participants to assess the values of Nike compared to Tiger Woods and see if they compare with the image that they believe Nike to portray

The constraints to this research have made it necessary to carry out the questionnaire using a sample. A sample is needed to ensure a feasible assumption on the findings. A sample is part of the total population Saunders et al (2009).Deciding on a suitable number of participants is more or less a matter of judgement. Saunders et al (2009). The more participates a questionnaire has the more precise the findings will be. The author used a convenience sampling method when choosing the participants of the questionnaire. Gravetter and Foranzo (2009) defines convenience sampling method as a type of non probability sampling in which the sample is chosen based on the access to participants that the researcher has available to them. The questionnaires were administered through a number of networks being university students at the University of Bedfordshire across both campus, Pohill and Park Square and local sports team were also questioned to ensure that a range of ages were obtained. A convenience sampling method was chosen due to the access to participants that the researcher has. Although a criticism of this method is the bias that the researcher and participants might have, the researcher ensured that the questionnaire was anonymous so that participants would be able to give a fair opinion of the subject. Inside the convenience sampling the researcher used a quota sampling technique defined by Brown and Dowling (1998) as an attempt to provide a representative sample , where she ensured that the population of the study comprises of 100 individual adults both a mixture of 50 men and 50 women to get a fair gender representation in the sample. The response rate to the questionnaire was 50% as 200 people were approached and asked to complete the questionnaire, to which some took the questionnaire away and agreed to send back and others only completed the initial part of the questionnaire which was not worth including in the findings as it would have given an unfair representation. The size of the sample is adequate enough for the researcher to justify the credibility of her findings as xxxxxx A final justification for this method is that the researcher felt that the participants had the best knowledge to form their views and opinions of the subject as the participants are involved with news and sports of which Tiger Woods is represented in and the researcher was aware of this, although this could be seen as impacting on the results the difference in age, gender and relationship status between the sample was sufficient enough to gain a representative finding .

Validity, Credibility and Reliability

How valid and reliable the study is refers to the research being conducted fairly and that the product represents as much as possible the experiences of those being studied Ely (1991). Baillie (1995) states that the terms validity and reliability are usually discussed in quantitative research x xx

A principal concern in any research is that the researcher must always be aware of ethical aspects that could be identified. Everyone who participates in the questionnaire did so under the understanding that the questionnaire is anonymous and the researcher cannot determine participant’s answers.

Credibility in this study will be enhanced by employment of triangulation, which consist of various data sources for example, theory research from books, specific research relating to the topic from journals and newspapers and questionnaires being carried out.

Validity is the accuracy of the results created by the process precisely answering the research question (reference). The method used should determine necessary information from participants from which an analysis can be carry out as regards to the investigating question. . However the researcher is determining the questions and in closed questions the answers as well, this can be seen as an inadequacy as this may not be a true reflections of how the participant perceives the question. For example the question asked regarding the qualities of Nike and the perception of Tiger Woods which are then subsequently compared to each other. The researcher felt that this was the best way to obtain the answer to this question xxxxxxx

Using questionnaires as a method for data collection can lack the validity of the results due to a number of factors such as the issue that participants may not fill the questionnaire in truthfully as they may answer the questions they way the feel the researcher wants them to. To ensure that this is not the case for the researcher she has made participants aware the all results are anonymous and has not asked for their name or contact details to make them feel more comfortable when answering the questionnaire which in turn will give an accurate response to the questions.

Reliablity

The comparison of the primary research and the secondary research will enable the author to establish the effect of Tiger Woods behaviour on Nike.

Findings/Analysis/Discussion

The survey was handed out to 100 respondents, whilst the author waited for the survey to be completed by the respondents to ensure that the results were gathered effectively instead of waiting for participants to take the questionnaires away and sending them back, as the response rate for this is significantly low (REFERNCE). The author spent four weeks obtaining participants for the survey.

The questionnaire was completed by 51 women and 49 men initially however throughout the questionnaire 7 participants did not continue as they felt they could not answer the questions as they were unaware of either Tiger Woods or his behaviour. The gender was asked to establish a fair opinion from both men and women, this will also enable the author to assess if men or women were effected more so than the other. The relationship status of each participant was asked to see if there was any correlation with the status of their own relationship and the opinions of Tiger Woods behaviour as married women could have a more negative opinion than a single male.

The awareness of Nike

The findings show that 100% of the participants knew about the Nike brand showing how popular at well known the trademark Nike tick and its ‘Just Do it’ motif is.

The perception of Nike

Comparing the perceived perception of Nike the brand and Tiger Woods

Has Tiger Woods Behaviour impacted negatively on the Nike brand to consumers

From the data the author can see that the majority of participants felt that their views and opinions on Tiger Woods had changed since the revelations of his extra martial affairs, with 67% of the respondents revealing that this was the case. This shows the author that the perception and image of Tiger Woods is

However although the majority of the participants had negative views on the behaviour of Tiger Woods and the controversy that he caused, it didn’t not seem to transfer to the representation of Nike. It seems that the participants felt that the Tiger Woods did not represent the values and characteristics of Nike as only 16% matched the characteristics completely, there was however a number of charteristics that did match both Nike and Tiger Woods.

INSERT TABLE HERE

Differences on opinions and views were noticed through a number of different factors such as the age range categories, relationship status and the gender of the participant. Findings showed that women, older people and married individuals had the most negative view on Tiger Woods behaviour and his relationship with Nike.A staggering 95% of married women were disgusted with Tiger Woods behaviour and felt very strongly against the fact that Nike had continued to keep him endorsing their products. These views are evident in the comments that are received from the married woman, with the majority of these women claiming that he is disrespectful and displaying unacceptable behaviour for a role model, where as the age range between 18-25 years old with 78% were the most relaxed and open minded on Tiger Woods and his behaviour with some comments claiming that people make mistakes. Older people (age range 66+) also had a high percentage with 75% of participants presenting negative results. These results show that the image and perception of Tiger Woods do not match up to the traits and attributes wanted from an endorser. Xxx states that a role of an endorser representing a company is to be a role model to its customers. This is something that the participants feel is not happening.

The continued use of Tiger Woods for Nike

Current Day opinions on the past subject

Overall opinion of the relationship between Nike and Tiger Woods on the Brand Image?

Conclusion

The research conducted was designed to investigate the reaction of consumers to the Nike brand after the negative press and behaviour of one of their top celebrity endorsers Tiger Woods. Nike took a big gamble to keep Tiger Woods as an endorser of their brand after the controversy that he had caused

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Nike’s CSR Challenge Case Study

In 2005 after reporting on its widespread abusive treatment in factory plans Nike’s came back to report on its social and environmental practices. Some of the Challenges that Nike and other apparel industries face in its supply chains around the World are many. Companies like Nike needs to consider people, planet and profit from now on. Nike understood as well as other competitors that seeking good societal relations should be seen as both good to society and good for profitability. The company understands now that the strategic shift for Nike’s Management can not only been seen as a close system.

Its future depends on the reshaping the signals that are being sent to customers, suppliers, investors, so that the company can also operate in a sustainable way, which is also financially viable. Just changing rules and regulation at the factory’s plants is not enough, companies also have to engage in Leadership and by this I don’t mean the traditional Leadership which involved leading people towards goal of the employer. Employees should engage in transcending leadership and get in a dialogue, action to address systemic problems and resolved them, or engage people on collective goals.

The only sad thing is that without changes to the financial markets, Nike may find its efforts in vain. The Statement by a Nike representative that “consumers are not rewarding us for investments in improved social performance in supply chain”. It meant that although Nike improved conditions and outcomes for its employees and sub contractor and that they slightly better working conditions to their third world employees and banned the hiring of children, they thought people in general would buy more stuff from them, just because Nike decided to be a bit nicer to employees and cost them money.

Apparently Nike is saying it wasn’t worth investing money into being more humane because at the end it did not resulted in more shoe sales. A stakeholder must be distinguished from a stockholder. They own a share of the corporation. A stakeholder is any group or individual that has a vital interest in the doings of the corporation. There are several other stakeholders of the corporation. These may include employees, customers, suppliers, local community to name a few. Managers need to understand the open systems approach in order to construct support Systems.

Examples of changes in practices of abroad factory plants like in this case Nike made some changes and are examples of the adaptation that organizations have to exercise to respond to the demands of the open system. This means that firms need to watch their customer needs, their employee’s needs, and the needs of the community. In international ventures, understanding the local culture and relying on the network of relationships created in that subsystem will be keys to increase their success. What they mean by “Leaders beyond borders”.

All it is is people who can see across borders created by others, take action and address systemic problems within an organization in this case. The social and environmental challenges are known and numerous. But by rethinking they also represent some of the best opportunities for business. I don’t think there is a perfect science to achieve a compatibility of profits with people and planet, but I think it is the responsibility of all, as a business, as a consumer to try to meet a middle ground in which all three people, profit and planet gain a decent benefit from one another.

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Minimum Wage and Nike Marketing Phrase

Nike is in many ways the quintessential global corporation. Established in 1972 by former University of Oregon track star Phil Knight, Nike is now one of the leading marketers of athletic shoes and apparel on the planet. In 2006, the company has $15 billion in annual revenues and sold its products in some 140 countries. Nike does not do any manufacturing. Rather, it designs and markets its products, while contracting for their manufacture from a global network of 600 factories scattered around the globe that employ some 650,000 people. This huge corporation has made Knight into one of the richest people in America.

The Nike marketing phrase “Just Do It! ” has become as recognizable in popular culture as its “swoosh” logo or the faces of its celebrity sponsors, such as Michael Jordan and Tiger Woods. For all of its successes, the company has been dogged for more than a decade by repeated and persistent accusations that its products are made in sweatshops where workers, many of them children, slave away in hazardous conditions for less than subsistence wages. Nike’s wealth, its detractors claim, has been built upon the backs of the world’s poor.

To many, Nike has become a symbol of the evils of globalization—a rich Western corporation exploiting the world’s poor to provide expensive shoes and apparel to the pampered consumers of the developed world. Nike’s “Niketown” stores have become standard targets for anti-globalization protesters. Several nongovernmental organizations, such as San Francisco–based Global Exchange, a human rights organization dedicated to promoting environmental, political, and social justice around the world, have targeted Nike for repeated criticism and protests.

News organizations such as CBS’s “48 Hours” hosted by Dan Rather have run exposes on working conditions in foreign factories that supply Nike. Students on the campuses of several major U. S. universities with which Nike has lucrative sponsorship deals have protested against the ties, citing Nike’s use of sweatshop labor. For its part, Nike has taken steps to counter the protests. Yes, it admits, there have been problems in some overseas factories. But the company has signaled a commitment to improving working conditions.

It requires that foreign subcontractors meet minimum thresholds for working conditions and pay. It has arranged for factories to be examined by independent auditors. It has terminated contracts with factories that do not comply with its standards. But for all this effort, the company continues to be a target of protests and a symbol of dissent. The Case against Nike Typical of the exposes against Nike was a “48 Hours” report that aired October 17, 1996. 3 Reporter Roberta Baskin visited a Nike factory in Vietnam.

With a shot of the factory, her commentary began: The signs are everywhere of an American invasion in search of cheap labor. Millions of people who are literate, disciplined, and desperate for jobs. This is Nike Town near what use to be called Saigon, one of four factories Nike doesn’t own but subcontracts to make a million shoes a month. It takes 25,000 workers, mostly young women, to “Just Do It. ” But the workers here don’t share in Nike’s huge profits. They work six days a week for only $40 a month, just 20 cents an hour. Baskin interviewed one factory worker, a young woman named Lap.

Baskin told viewers: Her basic wage, even as sewing team leader, still doesn’t amount to the minimum wage … She’s down to 85 pounds. Like most of the young women who make shoes, she has little choice but to accept the low wages and long hours. Nike says that it requires all subcontractors to obey local laws; but Lap has already put in much more overtime than the annual legal limit: 200 hours. Baskin then asked Lap what would happen if she was sick or had something she needed to take care of, such as a sick relative, and needed to leave the factory?

Through a translator, Lap replied: It is not possible if you haven’t made enough shoes. You have to meet the quota before you can go home. The clear implication of the story was that Nike was at fault here for allowing such working conditions to persist in the Vietnam factory, which was owned by a Korean company. Another attack on Nike’s subcontracting practices came in June 1996 from Made in the USA, a foundation largely financed by labor unions and domestic apparel manufacturers that oppose free trade with low-wage countries.

According to Joel Joseph, chairman of the foundation, a popular line of high-priced Nike sneakers, the “Air Jordans,” were put together by 11-year-olds in Indonesia making 14 cents per hour. A Nike spokeswoman, Donna Gibbs, countered that this was false. According to Gibbs, the average worker made 240,000 rupiah ($103) a month working a maximum 54-hour week, or about 45 cents per hour.

Gibbs also noted that Nike had staff members in each factory monitoring conditions to make sure the factory obeyed local minimum wage and child labor laws. Another example of the criticism against Nike is the following extract from a newsletter published by Global Exchange:5 During the 1970s, most Nike shoes were made in South Korea and Taiwan. When workers there gained new freedom to organize and wages began to rise, Nike looked for “greener pastures. ” It found them in Indonesia and China, where Nike started producing in the 1980s, and most recently in Vietnam. The majority of Nike shoes are made in Indonesia and China, countries with governments that prohibit independent unions and set the minimum wage at rock bottom.

The Indonesian government admits that the minimum wage there does not provide enough to supply the basic needs of one person, let alone a family. In early 1997 the entry-level wage was a miserable $2. 46 a day. Labor groups estimate that a livable wage in Indonesia is about $4. 00 a day. In Vietnam the pay is even less—20 cents an hour, or a mere $1. 60 a day. But in urban Vietnam, three simple meals cost about $2. 10 a day, and then of course there is rent, transportation, clothing, health care, and much more. According to Thuyen Nguyen of Vietnam Labor Watch, a living wage in Vietnam is at least $3 a day.

In another attack on Nike’s practices, in September 1997 Global Exchange published a report on working conditions in four Nike and Reebok subcontractors in southern China. 6 Global Exchange, in conjunction with two Hong Kong human rights groups, had interviewed workers at the factories in 1995 and again in 1997. According to Global Exchange, in one factory, a Korean owned subcontractor for Nike, workers as young as 13 earning as little as 10 cents an hour toiled up to 17 hours daily in enforced silence. Talking during work was not allowed, with violators fined $1. 20 to $3. 0, according to the report.

The practices were in violation of Chinese labor law, which states that no child under 16 may work in a factory, and the Chinese minimum wage requirement of $1. 90 for an eight-hour day. Nike condemned the study as erroneous, stating that the report incorrectly stated the wages of workers and made irresponsible accusations. Global Exchange, however, continued to be a major thorn in Nike’s side. In November 1997, the organization obtained and then leaked a confidential report by Ernst & Young of an audit that Nike had commissioned of a factory in Vietnam owned by a Nike subcontractor. 7

The factory had 9,200 workers and made 400,000 pairs of shoes a month. The Ernst & Young report painted a dismal picture of thousands of young women, most under age 25, laboring 10 1/2 hours a day, six days a week, in excessive heat and noise and in foul air, for slightly more than $10 a week. The report also found that workers with skin or breathing problems had not been transferred to departments free of chemicals and that more than half the workers who dealt with dangerous chemicals did not wear protective masks or gloves.

It claimed workers were exposed to carcinogens that exceeded local legal standards by 177 times in parts of the plant and that 77 percent of the employees suffered from respiratory problems. Put on the defensive yet again, Nike called a news conference and pointed out that it had commissioned the report and had acted on it. 8 The company stated it had formulated an action plan to deal with the problems cited in the report, and had slashed overtime, improved safety and ventilation, and reduced the use of toxic chemicals.

The company also asserted that the report showed that its internal monitoring system had performed exactly as it should have. According to one spokesman: This shows our system of monitoring works … We have uncovered these issues clearly before anyone else, and we have moved fairly expeditiously to correct them. Nike’s Responses Unaccustomed to playing defense, Nike formulated a number of strategies and tactics to deal with the problems of working conditions and pay at subcontractors. In 1996, Nike hired Andrew Young, onetime U. S. mbassador to the United Nations and former Atlanta mayor, to assess working conditions in subcontractors’ plants around the world.

Young released a mildly critical report of Nike in mid-1997. After completing a two-week tour that covered 15 factories in three countries, Young informed Nike it was doing a good job in treating workers, though it should do better. According to Young, he did not see sweatshops, or hostile conditions … I saw crowded dorms … but the workers were eating at least two meals a day on the job and making what I was told were subsistence wages in those cultures. Young was widely criticized by human rights and labor groups for not taking his own translators and for doing slipshod inspections, an assertion he repeatedly denied. In 1996, Nike joined a presidential task force designed to find a way of banishing sweatshops in the shoe and clothing industries. The task force included industry leaders such as Nike, representatives from human rights groups, and labor leaders. In April 1997, the task force announced an agreement for workers rights that U. S. companies could agree to when manufacturing abroad.

The accord limited the work week to 60 hours and called for paying at least the local minimum wage in foreign factories. The task force also agreed to establish an independent monitoring association—later named the Fair Labor Association (FLA)—to assess whether companies are abiding by the code. 10 The FLA now includes among its members the Lawyers Committee for Human Rights, the National Council of Churches, the International Labor Rights Fund, some 135 universities (universities have extensive licensing agreements with sports apparel companies such as Nike), and companies such as Nike, Reebok, and Levi Strauss.

In early 1997, Nike also began to commission independent organizations such as Ernst & Young to audit the factories of its subcontractors. In September 1997, Nike tried to show its critics that it was involved in more than just a public relations exercise when it terminated its relationship with four Indonesian subcontractors, stating that they had refused to comply with the company’s standard for wage levels and working conditions.

Nike identified one of the subcontractors, Seyon, which manufactured specialty sports gloves for Nike. Nike said that Seyon refused to meet a 10. 7 percent increase in the monthly wage, to $70. 0, declared by the Indonesian government in April 1997. 11 On May 12, 1998, in a speech given at the National Press Club, Phil Knight spelled out in detail a series of initiatives designed to improve working conditions for the 500,000 people that make products for Nike. 12 Among the initiatives Knight highlighted were the following: We have effectively changed our minimum age limits from the ILO (International Labor Organization) standards of 15 in most countries and 14 in developing countries to 18 in all footwear manufacturing and 16 in all other types of manufacturing (apparel, accessories, and equipment. .

Existing workers legally employed under the former limits were grandfathered into the new requirements. During the past 13 months we have moved to a 100 percent factory audit scheme, where every Nike contract factory will receive an annual check by Pricewaterhouse Coopers teams who are specially trained on our Code of Conduct Owner’s Manual and audit/monitoring procedures. To date they have performed about 300 such monitoring visits. In a few instances in apparel factories they have found workers under our age standards.

Those factories have been required to raise their standards to 17 years of age, to require three documents certifying age, and to redouble their efforts to ensure workers meet those standards through interviews and records checks. Our goal was to ensure workers around the globe are protected by requiring factories to have no workers exposed to levels above those mandated by the permissible exposure limits (PELs) for chemicals prescribed in the OSHA indoor air quality standards. 3 These moves were applauded in the business press, but they were greeted with a skeptical response from Nike’s long-term adversaries in the debate over the use of foreign labor. While conceding that Nike’s policies were an improvement, one critic writing in the New York Times noted: Mr. Knight’s child labor initiative is … a smoke screen. Child labor has not been a big problem with Nike, and Philip Knight knows that better than anyone. But public relations is public relations. So he screen.

Child labor has not been a big problem with Nike, and Philip Knight knows that better than anyone. But public relations is public relations. So he have to keep a close eye on him at all times. The biggest problem with Nike is that its overseas workers make wretched, below-subsistence wages. It’s not the minimum age that needs raising, it’s the minimum wage. Most of the workers in Nike factories in China and Vietnam make less than $2 a day, well below the subsistence levels in those countries. In Indonesia the pay is less than $1 a day.

The company’s current strategy is to reshape its public image while doing as little as possible for the workers. Does anyone think it was an accident that Nike set up shop in human rights sinkholes, where labor organizing was viewed as a criminal activity and deeply impoverished workers were willing, even eager, to take their places on assembly lines and work for next to nothing? 14 Other critics question the value of Nike’s auditors, Pricewaterhouse Coopers (PwC). Dara O’Rourke, an assistant professor at MIT, followed the PwC auditors around several factories in China, Korea, and Vietnam.

He concluded that although the auditors found minor violations of labor laws and codes of conduct, they missed major labor practice issues including hazardous working conditions, violations of overtime laws, and violation of wage laws. The problem, according to O’Rourke, was that the auditors had limited training and relied on factory managers for data and to set up worker interviews, all of which were performed in the factories. The auditors, in other words, were getting an incomplete and somewhat sanitized view of conditions in the factory. 5 The Controversy Continues Fueled perhaps by the unforgiving criticisms of Nike that continued after Phil Knight’s May 1998 speech, beginning in 1998 and continuing into 2001, a wave of protests against Nike occurred on many university campuses. The moving force behind the protests was the United Students Against Sweatshops (USAS). The USAS argued that the Fair Labor Association (FLA), which grew out of the presidential task force on sweatshops, was an industry tool, and not a truly independent auditor of foreign factories.

The USAS set up an alternative independent auditing organization, the Workers Rights Consortium (WRC), which they charged with auditing factories that produce products under collegiate licensing programs (Nike is a high profile supplier of products under these programs). The WRC is backed, and partly funded, by labor unions and refuses to cooperate with companies, arguing that doing so would jeopardize its independence.

By mid-2000, the WRC had persuaded some 48 universities to join the organization, including all nine calmpuses of the University of California system, the University of Michigan, and the University of Oregon, Phil Knight’s alma mater. When Knight heard that the University of Oregon would join the WRC, as opposed to the FLA, he withdrew a planned $30 million donation to the university. 16 Despite this, in November 2000, the University of Washington announced it too would join the WRC, although it would also retain its membership in the FLA. 7 Nike continued to push forward with its own initiatives, updating progress on its website. In April 2000, in response to pressure that it was still hiding poor working conditions, Nike announced it would release the complete reports of all independent audits of its subcontractors’ plants. Global Exchange continued to criticize the company, arguing in mid-2001 that the company was not living up to Knight’s 1998 promises, and that it was intimidating workers from speaking out about abuses.