Friday, August 1, 2008

Nike Shows How a Principled Brand Walks the Walk

Branding isn't about who you say you are; it's about what people perceive you to be. And in the era of social media--with so many people sharing so much information across so many networks--the way to alter perception of your brand isn't to tell consumers you are different, it's to be different. Yesterday, Nike demonstrated in a very real and inspiring way how to be different.

Nowadays, advertising-savvy consumers have little interest in who you say you are; instead, the key to building a value-based relationship between consumers and the brand is to provide experiences that consumers believe and that build respect, affinity, and association. Consumers seek brands with a world outlook that matches their own, and the brands that earn consideration and loyalty are ones consumers find real and believable.

To be trusted, a brand must have principles that are consistently communicated through its actions and words. Nike is an example of a brand that most feel is real and believable; its guiding principle is that humans should let nothing stop them from being their best physically and achieving whatever their willpower and body will permit. This is communicated with their simple three-word motto, artful and inspirational ads, and striking product packaging.

Funny thing about principles: they sound good when put in a frame on the wall, but living them day-to-day is easier said than done. A principle isn't a principle unless it has the potential to cost you money, and when money is on the table most brands (and people) find their principles are more elastic--more like guidelines than unwavering truths.

Not Nike. The company was faced with a challenge: Hold Olympic athletes to the contracts that require them to wear only Nike products, or publicly admit a competitor's products may be better for a specific circumstance. Nike had every right to expect the athletes to uphold their commitments in return for the financial support Nike provided, but swimmers wearing Speedo's new racing suit have been mowing down world records in advance of the Olympics.

According to CNBC, Nike has granted permission for its Olympic swimmers to compete in Speedo's swimsuits. Said a Nike spokesperson, "Nike is a company that exists to serve athletes – hence this limited exception to allow Nike swimmers to compete without distractions was the correct thing to do given the very unique circumstances."

If this sounds like an easy PR decision for Nike, consider this: Nike's market share in swimsuits is down 7 percent from 17.5 to 10.6 percent in terms of dollars this year, while Speedo sales are up 9.3 percent to 62 percent of the market, according to SportsOneSource.

Nike could get a small benefit should their Olympians win while wearing Nike-branded swim caps and goggles, but the bigger win here is to Nike's reputation. They've admitted a competitor's product may be better for Olympic-caliber swimmers, but the statement they've made about the brand and the rest of their products far outweighs the harm to their one line of competitive swimwear. No amount of advertising could possibly say more about the brand's commitment to athletes than this one announcement, and the Word of Mouth online has been significant and positive.

Other brands faced the same challenge and failed the test. Adidas is insisting that its swimmers wear their swimsuit despite outspoken comments from the team and their desire to go Speedo. Swimsuit manufacturer Arena broke off its sponsorship deal with the Italian swim team after their star switched from their brand to the Speedo variety.

Too often, marketers are so concerned with telling customers their brand positions that they forget to live them. This week Nike could have caved on its principles, but they decided to live by them. They may have conceded a small battle to Speedo, but Nike made huge headway in the war for the hearts and minds of athletes everywhere.

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