About Face! Nike Alters Crisis Management Approach After Tiger Woods
Nike showed great wisdom this week when it suspended their relationship with Oscar Pistorius, the double amputee “Blade Runner” from South Africa who has been accused of murdering his girlfriend, model Reeva Steenkamp, on Valentine’s Day. Making the decision to cut ties with a celebrity athlete is more difficult than you might think. The Tiger Woods scandal a few years back clearly demonstrated the conundrum that companies experience. Some companies, like Accenture completely cut ties with Tiger Woods while others like Nike remained “faithful”. Nike chairman, Phil Knight, even went so far as to say it is “all part of the game” and referred to Wood’s “indiscretions as a minor blip”. But since that decision Nike seems to have changed their tune --- choosing to drop both Lance Armstrong and Pistorius. So what changed? Did Nike’s internal research discover the Tiger Wood’s decision damaged the brand? We will probably never know.
However, recent research published in academic marketing journals demonstrates that a company’s brand image can experience significant and long-term damage when a celebrity endorser commits a highly visible moral failure. In such instances, it is critical that companies act quickly and decisively when faced with this sort of advertising tsunami.
Corporations utilize celebrities because of their ability to create a “personality” for their brand. When a celebrity is repeatedly paired with a brand, his image helps shape the image of that brand in the minds of consumers. And in the most successful brand/celebrity endorsement relationships, consumers will ultimately transfer these bundles of meaning out of the products and into their own lives.
However, research now shows that when negative meanings become part of the celebrity’s bundle of meanings, consumers will metaphorically transfer the meanings into their perception of the product as well. Thus, the negative celebrity information has the potential to not only affect how consumers feel about the celebrity, but it can also affect their feelings toward the product the celebrity is promoting. Out of psychological self-preservation, consumers will often shun the once preferred brand because they do not want the new negative bundle of meaning to transfer into their own lives.
Companies that do not quickly cut ties with morally damaged celebrities risk a significant decline in sales through the infection of their brand. In addition long-term damage to brand image and an overall decline in brand equity are likely.
My guess? That’s precisely what Nike discovered in the months following the Tiger Wood’s decision.
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Video courtesy of Nike