Many of these challenges can arise in political jurisdictions with weak regulatory frameworks and means of enforcement, higher level of corruption and inadequate provision of social services. These conditions coupled with inherent cultural issues in the global environment, make it more likely or Nine’s own value chain to run afoul with international community norms, or that civil society actors will exploit its reputation vulnerabilities in the hope of improving those conditions. The more visible the company is, the better the chance of stakeholder advocacy will be in garnering critical media coverage for their agenda.
In Nine’s case it was the Made in the USA Foundation. Thereby raising reputation risk for Nikkei. CRISIS FACED BY NIKKEI Historical Movement of Nine’s share price With regard to the graph, the fluctuations from year 1990 to 2010 can be described by the different crisis Nikkei faced. However in the presentation, we only focused on two crisis, namely the endorsement crisis and the sweatshop crisis. * The Facts Tiger Woods product line of shoes was not selling because Nikkei priced the goods for hardcore golfers but their styling was more for the youth market.
Other than that, there was the brown-shoe phenomenon that showed a demand that was extended to outdoor brands such as Timberland. * Nine’s response Nikkei realized that the market demand from teenagers who are Nine’s largest and most important target market increased very fast and thus Nikkei started to expand its arresting market to younger consumers because of its severe competition with Ideas and Rebook. It expanded its products to selling sports related apparels rather than Just sneakers; Nikkei transformed shoes into status symbols with seasonal model changes to appeal as cool or be in the youth or hip hop culture.
They became alert to the changing current market trends today so that new products and new advertising will have more impact in the market by giving consumers what they want, appealing to their psychological and physical needs. However for people in the 30 to 50 years old group, they don’t worship celebrities too much. The advertising can be focused on Nine’s brand identity and long history as well as great achievement, showing Nine’s brand personality of bravery and venturing spirit.
For example: in the golf sector, Nikkei would sell not shoes but the athletic ideals of determination, individuality, self- sacrifice and winning. In addition, Nikkei co-founder Knight drew on some Nikkei veterans, executives who carry the heritage and culture of Nine’s early years. But he also recruited some key players from far outside Nikkei and its industry. SCOFF Blair, who came aboard in 1999, was lured from Pepsi, while Mindy F. Grossman was plucked from Polo Ralph Lauren equines. This shows that Nikkei was focusing on the long term solution. Nine’s endorsement crisis can be linked to the Social Media crisis The rapid development of the Internet is the efficient tool of advertising for Nikkei, especially between young people who have more casual lifestyle and fashionable tastes. So the new trends also provided Nikkei with more chance in marketing and advertising. Society increase reliance on the internet has had a negative effect on the company, because anyone who has had a bad experience with the company or even high profile athletes with scandalous lives can be viewed by millions of people on a Website.
Nikkei has to develop a contingency plan to overcome this potential scenario / crisis because this will affect their precious brand image and hence is a risk that it bears for its many endorsement deals. A recent example would be the Tiger Woods scandal in late 2009. Since Nikkei did not take any action to examine all possible scenarios and consider their possible consequences (Avoiding the crisis). Or even developing a plan to deal with the potential crisis and test the plan (Preparing to manage the crisis). We shall begin analyzing Augustine six stages of crisis management starting from “Recognizing the crisis. * Recognizing the crisis Gillette, Storage and AT&T stopped featuring Woods in TV and print ads late last year after he became embroiled in a scandal over numerous extramarital affairs and then took an “indefinite break” from golf. Woods had been pulling in $100 million a year in endorsements before the dodgy details of his personal life came to light and advertisers broke ties with him. Sales dropped for Woods-endorsed Nikkei golf products after the scandal erupted. * Containing the crisis Nikkei made a decisive action and continued to support Tiger Woods.