Consumer Behaviour: Application of Theories to Nike

In this week’s readings, all focused on the topic of “consumer behavior” by explaining how consumers make decisions using system 1 and system 2. Both Kahneman (2011) and Barden (2013) describe that there are two decision-making systems: system 1 is known as the autopilot, an implicit system that operates quickly with no effort. While system 2 is the pilot that requires flexible decision making and usually associates with “a subjective experience of agency, choice, and concentration” (Kahneman, 2011, p. 60). Using the example discussed in White et al.,’s article(2016), system 1 would be reading the label of a product (such as baking soda) and system 2 would be deciding whether to buy the product when it has damage on the package. 

In relation to this theory, Nike recently launched a new ad that hopes to influence consumers to have a new impression on Nike, and to motivate them to purchase more products from this brand. From the article by Gibson (2020), Nike released a short ad dedicating to this weekend’s Chinese New Year and the red pocket tradition. In Chinese culture, adults usually give children red pockets (with cash in it) during Chinese New Year which represents a sense of luck for the new year. In the ad, the girl tries to outrun her aunt with a pair of Nike shoes to avoid accepting the money. This then goes on for years until the niece is grown up, she invites the aunt over for Chinese new year and tries to give her a red pocket. But the aunt runs with her own Nike’s and continues to run. 

In this case, system 1 is identifying Nike is a shoe/athletic brand, system 2 is the decision process to which if someone wants to buy Nike shoes because they believe Nike is a brand that has meanings beyond the products.  Moreover, Nike understands the importance of the associate machine (Barden, 2013): when we associate a phrase with a concept such that “vomit” associates with sickness and feeling nauseous. As Barden explains that our brain will acknowledge the idea if something happens repeatedly and then builds associative connections (2013). In Nike’s case, since consumers already know Nike is an athletic brand; so the marketing team wants to build upon it by adding “culture” to the brand. 

Another important concept in marketing Braden mentioned is framing (2013): “framing explains how brands influence purchase decisions: brands operate as the background, framing the perception and, with it, the experience of the products” (p.22). Due to framing, branded products are considered more superior than unbranded products when the products are identical (Braden, 2013). This occurs because some brands can create a higher value than the product is worth. For instance, Barden (2013) claims that Starbucks coffee is framed as a “short holiday” for consumers and they are willing to pay more for the experience. In like matter, consumers are willing to buy Nike products, which may cost double the price of Walmart products because Nike also frames its products. Its iconic slogan: “Just do it” represents fearlessness and achieving greatness, therefore consumers are happy to spend a little more on products that give them a confidence boost. Moreover, consumers may also view Nike as a brand that cares about different types of culture after seeing the Chinese New Year ad and may choose Nike over Lululemon (whose CEO made up the company’s name because the letter “L” does not exist in the Japanese language).  

While White et al. (2016) explain that damaged packing can affect consumers’ purchasing decisions, damaged brands can also lose loyal customers or have detrimental damage to its reputation in a short period. For Nike’s 30th anniversary of the brand’s iconic slogan, Colin Kaepernick became the new face of Nike’s “Just Do It” campaign: “believe in something. Even if it means sacrificing everything” (Abad-Santos, 2018). As a response to this, a social media outrage occurred where users shared videos and photos of burning Nike shoes and ripped socks online (2018). According to Abad-Santos, (2018), online users set Nike shoes on fire to express their opinions with Nike’s decision and to assert their own identity in a public space. While many consumers were not satisfied with Nike’s new campaign, Nike has predicted this outcome but believes sponsoring Kaepernick would outweigh the cost. 

To conclude, even though Nike may have damaged its reputation in previous years, this new Chinese New Year ad would reinforce consumers to change their perspectives that Nike is not just an ordinary brand for athletes, but truly believes in and supports the importance of culture and traditions. 

References:

• Abad-Santos, A. (2018, September 6). Why the social media boycott over Colin Kaepernick is a win for Nike. Retrieved from https://www.vox.com/2018/9/4/17818148/nike-boycott-kaepernick
• Gibson, D. (2020, January 15). Nike's first Chinese New Year ad brings tradition and family together in playful pursuit. Retrieved from https://www.thedrum.com/news/2020/01/15/nike-s-first-chinese-new-year-ad-brings-tradition-and-family-together-playful
• Kahneman, D. (2011) Thinking, Fast and Slow. Chapters 1-5.
• Barden, P. (2013) Decoded: The science behind why we buy. Chapter 1
• White, K., Lin, L., Dahl, D., & Ritchie, R. (2016). When do consumers avoid imperfections? Superficial packaging damage as a contamination clue. Journal of Marketing Research, 53(1), 110-123.