http://money.cnn.com/video/news/2013/02/14/n-nike-oscar-pistorius-sponsorship-homicide-shooting.cnnmoney/index.html?source=cnn_bin
This video pretty much just talks about the recent troubles that Nike has faced involving their sponsored athletes. Some of their recent troubles have been with Tiger woods and his extramarital affairs, Lance Armstrong and the doping scandal, and now the most recent with Oscar Pistorius and the alleged murder of his girlfriend. Besides the fact that these recent scandals are a public relations nightmare, they also cost Nike a lot of money and potential customers. Having to pull ads and cut off sponsorships can cost millions of dollars and there is also the potential that this could hurt Nike's fan base cutting demand for their products.
The financial loss of the continuous scandals streak is huge, however I would be worry more about the public image more if I was Nike as the potential loss could span longer than expected, and customer loyalty is something easy to change nowadays, given the competitiveness of the market. Being the giants in the industry, alongside with Adidas, one incident like this could turn things rapidly, especially with how the German corporation Adidas hasn't been involved with any recent scandalous event.
ReplyDeleteI disagree with the idea that people will turn to competitors companies. Nike as a brand has probably one of the biggest followings there is today and with this sort of company, I think most people only associate the positives with celebrity endorsement. Once the athlete or celebrity takes a wrong turn, they take the symbol off and no harm is done. I would find it harder to believe that Nike would lose a portion of their customers just based on a few athletes they used to sponsor. Especially because they have the majority of the sports market, they would have to do a lot to lose their lead.
ReplyDeleteNike cannot control the athletes they sponsor and the actions they take. As of recent Nike has been under fire for the scandals that have been emerging. Nike has also cut the campaigns of Tiger Woods, Lance Armstrong, and most recent Oscar Pistorius, the athletes surrounding these scandals. The actions of these athletes have put Nike in a negative light, but this can change. They can donate money to certain foundations to raise the awareness of the crimes and actions that these athletes have recently committed. Yes, Nike will face a financial loss and lose followers because of the recent events, but Nike is such a household name that these losses will be insignificant in the long run. Nike controls majority of the sports market and I do not see things slowing down even after these scandals.
ReplyDeleteDespite all the criticism Nike has been receiving lately in the press due to its scandals, the company still has a strong following. Therefore, people will still support the company in the long run and may only have a small financial consequence on the company in the short run. Yes, this may hurt the company's image or reputation, but as big as Nike is and the caliber it operates at, its Public Relations department will fix things up for the company's image. Also, this can be used as a learning experience for who Nike chooses to sponsor in the future. They may have to be more cautious in who they sponsor so their brand name doesn't get besmirched again.
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