NIKE's Unusual Business Strategy to Market itself & make Billions of Dollars? Nike Mind Blowing Business Case Study thumbnail

NIKE’s Unusual Business Strategy to Market itself & make Billions of Dollars? Nike Mind Blowing Business Case Study

Nike is one of the greatest brands in the world. And time and again, Nike has established new benchmarks with its iconic marketing campaigns. But on third of September 2018, Nike had a campaign that literally broke the internet in the wrong way. This commercial became so controversial that President Donald Trump himself put out a tweet bashing Nike for their commercial, people started burning Nike shoes and what followed next was a series of catastrophes with boycotting Nike trending on Twitter. On top of this, the media started covering all this drama, which again led to a tonne.

Of bad publicity. But you know what, guys? While all this drama was going on, just when everybody thought that Nike sales were going down the drain, the world was shocked to knowthat after this controversial ad, Nike sales actually shot up by 31%, and their quarterly earnings shot up by $129 million. And when this news broke out, the stock priceshot up by 36% and Nike gained a market cap of $6 billion. The question is, what exactly was this commercial? How did Nike use this controversy to make$100 million extra, and most importantly,.

As students of marketing, what are the lessons that we need to learn from Nikes genius marketing strategy. This video is brought to you by KuKu FM butmore on this at the end of the video. This is a story that dates back to 2016, America. And just like the George Floyd case in 2020,even back then, there was several instances of police brutality on black men. So an NFL player named Colin Kaepernick kneeled during the national anthem as a gesture of protest against this police brutality. And this gesture, took the black lives matterto another level.

Millions of people started posting on social media to both support and criticise Colin Kaepernick. And this became such a burning issue that even President Donald Trump tweeted about it. However, within some time, Kaepernick was left unemployed with none of the 32 teams willing to sign in for the 2017 season. Soon enough, many other players started protestingin their own ways, as the Black Lives Matter movement started catching fire. And that is when on third of September 2018,Nike introduced the world to the iconic dream.

Crazy commercial. And this commercial had the voice of ColinKaepernick himself. Within just a few hours, this commercial wastrending on every single social media platform. And within some time, there were more than2.7 million posts referring to the Nike brand. This led to a massive social media outrage,we saw people burning Nike shoes, and the President again tweeted about it. Now the question is when this commercial wasmeant for such a noble purpose, and so many people resonated with it. Why were people burning Nike shoes?.

And why was there so much hate for the Nike brand? As it turns out, this was a result of somethingcalled Bipolarisation wherein one segment of people saw this as a gesture of courageand support for the minority of the United States, whereas the second segment of peoplesaw Kaepernick’s kneeling down as an insult to the national flag of America. So when Nike supported Colin Kaepernick, Nikewas seen as an anti national brand by this particular segment of people. And these were the people who started the boycott of Nike trend on Twitter. As a result, when the sentiment analysis wasdone for the conversations around Nike, they.

Were absolutely terrible. According to brandwatch, immediately afterthe ad went live, the sentiment ratio around Nike drawn from 90% positive to more than60% in the negative. And as soon as the ad rolled out, the online conversation about Nike went from 72% positive to 65% in the negative. This was the disastrous impact of the dream crazy commercial. Then the burning question is that when so many people were boycotting Nike, and there was so much backlash? How is it even possible that Nike sales actuallyshot up by $100 million dollars?.

Well, the first part of this answer comes from this wonderful book written by a Nobel laureate called Daniel Kahneman. In this book, Daniel describes our human brainas a function of two systems, that is system one and system two, while system two is ascientist who can do all the mathematical and complex calculations, system one or thelimbic brain is the monkey brain. And this brain is involved in your behavioral and emotional responses. And the catch here is that if you emotionallyappeal to the limbic brain, you can command the trust of the humans. And the major driver of this trust is thepurpose of your action.

If you can resonate with the purpose of theopposite person, then that person or that group will automatically begin to trust you. And Simon Sinek phrased it very beautifullywhen he said, People don’t buy what you sell, they buy why you sell it. And this is where Nikes dream crazy campaigncomes in. The Dream crazy campaign was a purpose-driven campaign that stood by a purpose. That is the dignity, the respect and the safetyof the black minority in the United States. And as soon as people saw it, every singleperson who resonated with the Nike’s message, started sharing the video resulting into extremevirality.

Now on the outside, although it looked likea majority of the Americans were against Nike. If you look at the intricacies of the numbers,it reveals a completely different story. While market research shows that 13% of Americansidentify as African American, 18% of Nike buyers are black, while Hispanics or peoplefrom Spanish speaking countries account for 16% of US population. They represent 19% of Nike buyers, and Asiansaccount for 3% of the population, but 5% of Nikes customers, whereas the white populationin the US is 75%, but they comprise only 67% of Nikes customers. Therefore, when Nike released a minority supportingcampaign, 43% of Nikes customers were more.

Likely to relate and resonate with Nikes campaign. And Nike’s reports even say that a major chunkof Nike’s white customers also supported Colin kapernick. Secondly, the research done by the best marketingagencies in the world states that purpose driven marketing is by far the most powerfulmarketing strategy among the millennials and the Gen Z. And the fun fact is that this is what Nike’scustomer segment looks like. 15% of Nike buyers are less than 18 yearsold, 41% are 18 to 24 years old, and 19% are 25 to 34 years old, which means what 75% ofNikes customers are less than 34 years old,.

Who are extremely likely to resonate witha purpose driven marketing strategy of Nike. And this is where the magic happened. While most people saw the general Americanreaction and felt that Nike’s brand was going down the drain Nikes own customers actuallybecame even more loyal to the Nike brand, because to them. Now, Nike was not just a shoe company, itwas something way more than that. It was a representation of their opinion,and an icon that stood for their dignity. This is the reason why many many celebritieswho resonated with the campaign started sharing Nike’s commercial on their social media accounts.

And this included legends like Serena Williams,LeBron James, and even the Black Panther star Michael B. Jordan. Eventually, all of this together led to anextraordinary level of brand perception, leading to spike in sales by more than 100 milliondollars. And I don’t know how many of you have seenthis, but then This usually happens the case of politicians or Apple products, that iswhen people around them criticise their favourite politician or their Apple product. These people often tend to passionately defend their product or their favourite politician, sometimes even illogically.

Nonetheless, because of the criticism, theytend to find even more ways to support their Apple product or their favourite politician. You see, this is the byproduct of Bipolarisation. And because of this, there was a cherry onthe cake for Nike. In this process, Nike actually achieved thesuper powerful golden loop of publicity with the media, which says that anything that issensational, gets covered by media, and anything that gets covered by media becomes sensational. In this case, the raging reaction to the Nikead turned it into a sensation, which is why national media channels started writing aboutit.

And this turned it into a national issue inviting more publicity. As a result, the President himself tweeted about it. And this again turned it into an even biggersensation, which eventually resulted into more media publicity. And guess what, because of all these drama,Nike ended up getting $163.5 million worth of media buzz at zero cost. This is how Nike established a benchmark forviral marketing in the 21st century. And this brings me to the most important partof the episode and that are the lessons from the case study and the study materials tohelp you read further.

Meanwhile, if you’re someone who genuinelywants to know more about Nike and its revolutionary strategies, you should definitely read thisbook called shoe dog by Phil Knight. And if you don’t have the time to read theentire book, you can listen to the audio book in your own reason language using the KukuFM app. Kuku FM is India’s leading vernacular audiolearning platform and it’s got some of the best audio books in the world in six differentregional languages. Apart from this book, you can even listento the inspiring stories of Mark Zuckerberg, Steve Jobs, Elon Musk, and even JRD Tata. And you can get your hands on their 1000 hour content library by getting the annual subscription.

At just 399 rupees. On top of that, you can get a special 20%discount using the coupon code Think20, which will bring it down further to just 319 rupees. And lastly, if you’re among the first 1000people to click on the link below, you can use the code think50 and get a 50% discount on the Kuku FM subscription. So if you want to quickly get the knowledge of shoe dog and other wonderful books, download the Kuku FM app from the link in the description. Moving on, there are three very very important business lessons that we need to learn from Nike’s dream crazy campaign.

Lesson number one, 21st-century branding is no longer about just sales and discounts. And marketing is no longer just a nudge to sell your product. Today, they’re about establishing a deeperconnection with your customers and standing up for something that’s way beyond conventionalstandards. In this case, it was Nike’s courageous standard to sponsor Colin Kaepernick to support the right cause and use their advertisement asa symbolic representation of the dignity and safety of African Americans. Lesson number two, if you’re someone who wantsto excel in marketing, it is extremely important that you have an in depth understanding of three important subjects.

And these objects are consumer psychology,behavioural economics and human centred design. And the best books to start with these objects are hooked by Nir Eyal, Richard thaler’s Misbehaving and Daniel Kahneman, Thinking Fast and Slow. And last and most importantly, always remembercontroversial marketing, although it looks very lucrative on paper, it is a double edgedsword. When done right, it will put you on a pedestal but if done wrong, it can make an irreversible damage to your brand. A classic example of the same is the Gillette’swe believe commercial. So always study the failures as carefully as you study the success.

That’s all from my side for today guys, ifyou learn something valuable, please make sure to share it with your friends on Social media. And for more such insightful business and political case studies, please subscribe to our weekly newsletter.

Leave a Comment

Your email address will not be published.