Nike's Corporate Social Responsibility and Sustainable Marketing - Coursework Example

? Corporate Social Responsibility and Sustainable Marketing Contents Contents 2 Introduction 3 The Company 3 The Market 3 Diagnostics 7 CommunicationActivities of Nike 7 Advertising and Promotion 7 Packaging 10 Illustrations of the Advertisements of Nike Reflecting Awareness of Social Responsibility 11 Conclusions and Recommendations 15 References 17 Introduction The Company The entrepreneurial adventure of two people, Bowerman and Phil Knight belonging to the region of Oregon resulted in the full grown development of a global sportswear company, Nike. These people together with their employees helped the company to develop from only a distributor of footwear pertaining to the United States market to transforming its image as a world leader in the marketing of footwear, and other sports merchandise like apparel and equipments. Along the years of its entrepreneurial operations in the realm of sports equipments and merchandises the company has been able to design a large brand portfolio by taking into hold a large number of subsidiaries. The sportswear company, headquartered in Oregon operates based on its operations spread over 160 countries round the world. Working on the basis of a large value chain constituted by around 1 million people pertaining to the categories of suppliers, manufacturers and other support categories the company tends to bring about large scale innovation in the realm of sportswear (Nike Inc. 2011). The Market The global market for sportswear reflects two types of consumer trends. Consumers tend to purchase sportswear merchandise more in regards to enhancing their fashion quotients rather than using such for the sole purpose of sports. Nike is held to be the pioneer brand in holding sportswear as a contemporary fashion wear in the global market. During 2003 the total global market for sportswear shoes and other apparels amounts to around $58 Billion. Herein apparel tends to constitute around 71 percent while 29 percent is relegated to footwear. The same can be reflected in the form of the following graph as follows. Figure 1 (Play Fair 2004, p.6) Similarly the global market for sports and athletic wear amounts to around $41.5 billion. Herein, United States tends to contribute to around 41 percent of the global share followed by around the European Union by around 38 percent. The markets pertaining to Asia contribute to around 16 percent in the total global market for sports and athletic wear. The same can be reflected through the following diagram. Figure 2 (Play Fair 2004, p.7) In regards to positioning of the different brands in the global sportswear industry it is found that the major brands like Nike, Reebok, and Adidas constitute in around 14 percent of the total global market for such commodities. However less known brands like Fila, Umbro and again Puma tend to each gain around 1 percent market share in the total market during 2002. Other Minor brands like the Mizuno, Lotto and the Kappa tend to each contribute to around 0.5 percent of the total market share during the same period. Thus the three main brands, Nike, Adidas and the Reebok tend to dominate the marketplace pertaining to sportswear in the world (Play Fair 2004, p.6-10). The same can be reflected from the following graphs. Figure 3 (Play Fair 2004, p.8) Figure 4 (Play Fair 2004, p.8) Figure 5 (Play Fair 2004, p.10) In regards to the current scenario during 2007 the total sportswear industry is found to value to around $145 billion. Further the sector reflects an increasing trend in terms of global market growth irrespective of it being affected by economic downturns happening round the world (ITGLWF 2010). Diagnostics Communication Activities of Nike Advertising and Promotion In regards to advertising activities, Nike is held to largely depend on celebrities like Michael Jordan and Kevin Garnett along with Charles Barkley for promotion of its footwear to both developed and developing nations round the world. This advertising practice of the company through the use of celebrities has helped the company in largely marketing its footwear products to black children. The black children are observed to largely depend on sports like basketball as a way of livelihood. Through increased promotion based on advertisements the company is found to charge a whooping $100-$150 from these people for a pair of shoes. This extra price charged from such poor communities is used by the company in funding the promotional and advertising ventures taken (Brazelton et al. 1999; Frost 2007). The advertising and promotional activities of Nike have observed to bear strong ties to the level of corporate social responsibility paradigm of the concern. It is observed that the company had conducted promotional campaigns for the women class and for the youths pertaining to the region of United States to enhance their participation in the realm of global sporting events. Herein celebrity aided advertisements were aired by the company on televisions where celebrity people like Michel Jordan expressed views about how the use of sporting events in an enhanced scale would help the region counter the effects of poverty. Such advertising and promotional campaigns were also largely used in regards to regions belonging to Asia to counter controversies emanating from the company’s policies to exploit cheap labour force. Moreover the company is also found to communicate largely with its critics through the use of web interface in which Nike endeavoured to create a video in its web page reflecting its labour operations. However the promotional activities of the company especially those created in regards to alluring the youths in procuring their sport shoes started facing severe criticism from several corners. Critics stated that based on such advertisements a larger chunk of the youth population was sneaked and even killed for making them purchase the Nike shoes. These type of rumours as stated by the critics put a black mark on the level of promotional activities carried around by the company. The promotional and advertising activities of Nike is also held by critics as an endeavour to largely conceal the different set of exploitative activities run by the concern in regards to poor people and youths residing in developing economies. The critics observe that under a canopy of reflecting to protests against the situation of poverty and labour exploitation through the posting of videos in the websites reflecting different conversations of the people and the labour force the company still carries on such exploitative labour practices (Knight and Greenberg 2011, p.550-556; Hsu 2006, p.23-24). Similarly the false communication practices of Nike in regards to efficient management of the labour force in the factories and promoting a healthy work atmosphere through the different newspapers is observed to gain large amount of criticism and even litigation charges. In regards to enhancing the realm of promotional activities the Chief Executive Officer of Nike was found to reinstate the company’s caring motive for the labour class in a letter filed to the editorial body of New York Times. Similarly the company created virtual pages through which the people belonging to several Asian countries were encouraged to enhance their understandings that the factories of Nike were conducive to people and not exploitative in nature. The public relation activities of the company were also enhanced through the conducting of visits of the top management body to campuses pertaining to universities and colleges to gain cooperation of the people. Nike in regards to such enhanced promotional and public relation activities received a heavy bolt from the initiative taken by an individual, Marc Kasky in bringing to light the true situation behind such promotional concealment. Kasky endeavoured to bring to limelight Nike’s false practices of public relations and promotional activities in misleading people to believe that everything is perfect under the clouds when the real situation is just the contradictory (Hess and Dunfee 2007, p. 11-12; Cushman, Jr. 1998). In that Marc Kasky with one of his lawyer friends Alan Caplan filed a legal suit against the Nike Corporation for its fall promotional tactics in regards to employment practices. This case is an indication of corporate whistle blowing though the whistle blowing here had been conducted by an external candidate. In that Nike was largely charged for not being transparent in regards to the dimension of corporate social responsibility activities. The Nike vs. Kasky case is found to have cost Nike around $1.5 million during 2003 where Nike was required to submit this amount to the Labour Association in the region for the development of the labour force (Tienne and Lewis 2005, p.362-364; Odoteye 2006, p.18). Other communication activities carried out by Nike in the realm of corporate social responsibility contained of projecting it as a company that encourages the inclusion of diversity. The 2009 corporate website of Nike along with a number of advertisements both in print and visual media reflected the increasing endeavour of the company to innovate new products focused on the women class. In addition to encouraging women to take part in sporting events held by the company, Nike also focused in the production of footwear in regards to the Latin American population. Such communication activities carried out by the company through the internet, print and other visual media help reflect on the awareness of the company in regards to the needs of the external society. Again the website communication activities of the company during the 2001 period reflected the changes brought about in the manufacturing plants in regards to the age of the employees and other working conditions. Such activities can be taken as green washing ventures of the company in regards to the level of potential allegations rendered against its corporate image (Fox 2010, p.141; Fitzpatrick n.d., p.13). Packaging In regards to packaging elements and processes used the sportswear company, Nike embarked on its communication practices during the 2001 period where it reflected through its website the company’s concern to reduce the impact on the use of natural resources. The company management stated in the website that to reduce the impact on the use of natural resources in designing its packaging boxes the number of different styles of such box packs were greatly reduced from 18 to just only a single style. Moreover the communication program also reflected that the boxes designed for packing purposes were made focusing on folded designs so as to reduce the use of other elements like glues and metallic linkers. Thus herein the communication activities of Nike were found aptly targeted at reduction of the impact of natural resources for making of the packing boxes. Similarly The Company is also recorded to encourage awareness in creating a safer and cleaner environment both for the children and the adult population through inviting participation via its 2001 website for the recycling program on shoes and clean air and earth programs (Ferrell, Fraedrich and Ferrell 2010, p.390-391). Continuing on its social responsibility activities through the use of corporate websites as a viable medium the company through the use of 2009 website endeavoured to reflect how Nike along with other companies like Levi Strauss and Starbucks worked in urging the United States government in taking action to protect the natural environment. Another activity communicated by the company through the use of the 2009 website was the company’s endeavour to use environmentally friendly products like organic cotton in large amount for the production of shoes. This activity can be thus regarded as an enhancement of the social responsibility aspect of the company (Fox 2010, p.150, 152-153). Illustrations of the Advertisements of Nike Reflecting Awareness of Social Responsibility A list of Illustrations is reflected here in regards to the corporate social responsibility activities of Nike. Figure 6: Promotion for Use of Recycled Shoes (Nike, Inc. 2011) Figure 6: Encouraging Women (Nike, Inc. 2011) Figure 7: Nike in South Africa (Nike Inc. 2012) Figure 8: Nike’s Shoe Boxes (Allaway 2006, p.1) Figure 9 (Allaway 2006, p.1) Conclusions and Recommendations Nike from the above findings is found to enjoy a market leadership position in regards to the industry of sportswear and sports equipments around the world. However the company is found to gain a negative viewpoint of both consumers and people in regards to its wrong human resource policies aimed at mainly developing regions pertaining to Asia. The company therein worked on engaging children in the factories that did not have salient and hygienic work conditions. Nike, however went on to reflect its image as highly positive in regards to environmental and social policies through the different advertisements promoted through websites, newspapers, magazines and other visual media. The company in that had to face stringent lawsuits and similarly continued protests from several quarters owing to such activities. Thereby the company had to expend huge amounts and change its corporate image as flashed through the websites and other advertisements in respect of ‘Green washing’ activities. References Allaway, D., 2006. Nike – Shoe Box Packaging. State of Oregon: Department of Environmental Quality [pdf]. Available At: http://www.deq.state.or.us/lq/pubs/docs/sw/packaging/csnikeshoebox.pdf. [Accessed May 2, 2012]. Brazelton, F., et al., 1999. Study of Corporate Social Responsibility [online]. Available at: http://www.stanford.edu/class/e297c/poverty_prejudice/citypoverty/hedge_poverty.htm. [Accessed May 2, 2012]. Cushman Jr., J. H., 1998. New York Times: Nike Pledges to End Child Labor and Apply U.S. Rules abroad [online]. Available at: http://www.corpwatch.org/article.php?id=12965. [Accessed May 2, 2012]. Fitzpatrick, C., et al., No date: Sports for Social Change: Promoting Girls’ Empowerment through Sports in the Middle East. Columbia University: School of International and Public Affairs [Pdf]. Available at: http://sipa.columbia.edu/academics/concentrations/epd/documents/Final_Report_Ashoka_Columbia.pdf. [Accessed May 2, 2012]. Fox, J., 2010. How Apparel Companies Communicate Corporate Social Responsibility on Their Websites: a Longitudinal Study [pdf]. Available At: http://digitool.library.colostate.edu///exlibris/dtl/d3_1/apache_media/L2V4bGlicmlzL2R0bC9kM18xL2FwYWNoZV9tZWRpYS84ODY2OA==.pdf. [Accessed May 2, 2012]. Frost, R., 2007. Corporate Responsibility and Globalization [online]. Available at: http://www.globalenvision.org/library/8/1433. [Accessed May 2, 2012]. Hess, D., and Dunfee, T., 2007. The Kasky-Nike Threat to Corporate Social Reporting: Implementing a Standard of Optimal Truthful Disclosure as a Solution. Business Ethics Quarterly [pdf]. 17(1), 5-32. Available At: http://webuser.bus.umich.edu/dwhess/Hess%20and%20Dunfee%202007%20Kasky%20Nike.pdf [Accessed May 2, 2012]. Hsu, Y., 2006. Corporate Social Responsibility and Crisis Communication: Nike Taiwan Jordan Crisis vs. Paolyta Bullwild Crisis. University of Florida [Pdf]. Available at: http://ufdcimages.uflib.ufl.edu/UF/E0/01/45/41/00001/hsu_y.pdf. [Accessed May 2, 2012]. ITGLWF, 2010. Sportswear [online]. Available at: http://www.itglwf.org/lang/en/sportswear.html. [Accessed May 2, 2012]. Knight, G., and Greenberg, J., 2002. Promotionalism and Subpolitics: Nike and Its Labour Critics. Management Communication Quarterly [pdf]. 15(4), 541-570. Available at: http://www.uk.sagepub.com/cornelissen3e/Online%20reading%20pdfs/Knight.pdf. [Accessed May 2, 2012]. Nike Inc., 2011. About NIKE, Inc. [online]. Available at: http://nikeinc.com/pages/about-nike-inc. [Accessed May 1, 2012]. Nike Inc., 2011. Corporate Responsibility Report [online]. Available At: http://www.nikebiz.com/crreport/. [Accessed May 2, 2012]. Nike Inc., 2012. HIV is S.O.L. [online]. Available At: http://nikebetterworld.com/about. [Accessed May 2, 2012]. Odoteye, A., 2006. Nike, Inc. Case Study [Doc]. Available at: http: //www.tarleton.edu/Faculty/svitucci/cases/nike/nike%20case%20study%202.3.doc. [Accessed May 2, 2012]. Play Fair, 2004. Sportswear Industry Data and Company Profiles Background information for the Play Fair at the Olympics Campaign [pdf]. Available at: http://www.fairolympics.org/background/Company_Profiles.pdf. [Accessed May 2, 2012]. Tienne, K., and Lewis, L., 2005. The Pragmatic and Ethical Barriers to Corporate Social Responsibility Disclosure: The Nike Case. Journal of Business Ethics. 60, 359–376. Available at: https://faculty.unlv.edu/nill/Nike Case.pdf. [Accessed May 2, 2012]. . Read More