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Just Blew It

2/23/2019

by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

The stage for a college basketball game couldn’t get much bigger: two top-ten teams in a packed arena, one of the best rivalries in all of sports, several projected NBA draft picks in the lineup, two hall of fame coaches on the sidelines, the likely NCAA player of the year on the court, and the 44th president of the United States in the stands. Then a piece of footwear malfunctioned, and the stock price of the world’s most iconic sports brand took a dive.

This past Wednesday, #1 Duke hosted #8 North Carolina for one of the most highly-anticipated men’s college basketball games in recent memory. Tickets were selling at Super Bowl-like prices, not just to see the two storied programs clash, but also to witness what was sure to be a marquee performance by one of the most talented and exciting college athletes ever—Duke’s Zion Williamson.

Just an 18 year old, standing 6’ 7” and weighing 285 lbs., Williamson’s unique combination of extraordinary basketball skill and incredible athleticism had captured the attention of all college basketball fans, international news media, and every NBA team, making him the odds-on favorite to be the first choice in the league’s next draft. Then the unimaginable happened.

Just 33 seconds into the game, Williamson received the ball, took a few dripples, planted his foot near the foul line, and fell awkwardly to the floor, while a look of pain raced across his face. As those watching gasped, the cause of the slip quickly became apparent: Williamson’s foot had burst through his Nike sneaker. Camera footage even caught former President Obama, pointing to the court and saying “His shoe broke.”

The story spread like wildfire over traditional and social media, as sports analysts, basketball fans, and others reacted. Many expressed amazement at the occurrence. Rival sneaker maker Puma tweeted snarkily “wouldn’t have happened in the pumas.”

Nike execs were undoubtedly reeling from what must have felt like their worst nightmare: The best known player in college basketball and a likely NBA superstar had just suffered an injury because of their shoe. Not only did the chances of signing Williamson to a future multi-million-dollar endorsement deal drop precipitously, the endless images of the prodigy wreathing in pain with foot popped through the side of his Nikes, was a picture that athletes and other sneaker buyers would not soon forget.

Nike did wish Williamson well: “We are obviously concerned and want to wish Zion a speedy recovery.” The same company spokesman added, “The quality and performance of our products are of utmost importance. While this is an isolated occurrence, we are working to identify the issue.” Still, the day after the blowout, Nike’s stock fell by 1.05%.

Was Nike simply the sufferer of a very unfortunate accident at one of the worst possible moments? Probably not. It seems that Williamson’s shoe blowout could have been predicted and prevented in light of previous player experiences, as well as others’ product reviews.

In 2016, the foot of Orlando Magic’s Aaron Gordon blew through the side of some Nikes when he landed after a dunk. Two years earlier, in the same NBA season, Golden State’s Andrew Bogut, the Spur’s Manu Ginobili, and the Sixer’s Tony Wroten, all experienced major Nike malfunctions.

Of course, one can argue that Williamson and these professional athletes put more strain on a pair of basketball shoes than the average sneaker wearer does, which is probably true. Many average wearers, however, also have experienced quality issues with their Nikes. Some have been frustrated enough to upload their sneaker stories to YouTube, for instance:

One consumer shows how the soles separated from the rest of his $200 Nikes after limited wear.

Another tells how several different pairs of his Air Jordans have fallen apart after moderate use.

A golfer shows how the soles came off his new-looking Nike golf shoes while playing.

Another user shows how his Nike Shox are falling apart after about six months. He laments, “I spend so much money on a shoe, and this is what it comes down to. I thought better of Nike, but this is what it is, y’all.”

Besides these sad stories, others have posted about similar durability issues with their Nike Air LTD’s, their Nike TN’s, and their Nike SB Diamond Dunks.

Four years ago Nike pulled the Lebron 12 from the market on the day of its scheduled release due to quality concerns. About three years ago KicksOneTwo noted ongoing quality control issues with Nike sneakers.

But, Nike’s annual footwear revenue is over $21 billion, which means it sells hundreds of millions of shoes a year, so aren’t there bound to be some production problems? Yes; however, it’s curious that in so many of the defect videos, the problem is the same even for different kinds of Nikes—the shoes just come apart, similar to the way they did for Williamson and for the NBA players mentioned above.

I’ve also had a similar experience with the brand. It had been several years since I’d gone running, when I decided to put on an old pair of Nike running shoes I owned and take a jog around the neighborhood. It wasn’t long into the run when I started to hear an unusual noise and feel a flapping under my feet. I soon realized the soles were falling off my running shoes. Granted, it was an old pair of sneakers. Still, I’ve owned many different styles and brands of athletic shoes over the years, including ones that I’ve worn much harder, but that’s been the only time anything like that has happened to me.

So, maybe Nike does have quality issues that need to be addressed, but some may be wondering what they have to do with the company’s marketing? Well, effective marketing involves much more than what a company says, or communicates.

Every marketing students learns the four P’s of the traditional marketing mix: product, place, promotion, and price. A primary objective of an entire organization, not just its marketing department, should be to ensure that each “P” meets the target market’s needs, as well as the organization’s goals, ultimately creating a mutually beneficial exchange.

However, if a company’s product is deficient in some way, it may overcompensate with another P, often promotion, which reminds me of a metaphor I've used before—baking a cake. Sometimes a cake comes out of the oven with cracks, which can be hidden with a layer of icing. The deeper the cracks, the thicker the icing needed to cover them.

It seems that Nike shoes on whole have some “cracks,” which the company has adeptly covered over the years through enticing layers of communication, ranging from highly-produced TV commercials, to prominent team sponsorships, to superstar endorsers.

That’s not to say that Nike’s value proposition is just a façade—not by a long shot. The company generally makes good quality products that serve people well, otherwise it wouldn’t be the world’s most valuable sports brand. Still, a significant number of people probably do buy into Nike more because of the icon’s icing than the consistency of its cake.

I still haven’t seen from Nike a true apology to Williamson for the shoe blowout. Saying that it wishes him well and promising to investigate the issue do not constitute a confession. Perhaps for legal reasons, Nike really hasn’t taken ownership of the incident.

No company or product is perfect; accidents happen. However, even for a company as big as Nike, the reoccurrence of such high-profile product malfunctions should give everyone pause, from the guy wanting to jog around his neighborhood to the next NBA superstar looking to ink a multi-million-dollar shoe deal. Nike will recover from the latest incident, but the injury to Williamson and the damage to the company's brand make what led up to the shoe blowout “Mindless Marketing.”

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Whole Grain Isn't the Whole Story

2/8/2019

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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

You’re at a restaurant with friends and order a pepperoni pizza. The waiter brings the pie, which has a single piece of pepperoni in the middle. Your whole table expresses surprise, to which the server replies, “The pizza has pepperoni, so it is a ‘pepperoni pizza.’” Most people would not appreciate that response, yet that appears to be the tack some food marketers are taking in promoting their whole grain products.

You’ve probably noticed the phrase “whole grain” appearing more and more on product packages, ranging from breakfast cereals to bread. What’s your interpretation when you see “whole grain” on the front of a box? It’s reasonable to assume that all of the product’s grain content comes from whole grains, or at least that whole grain is the primary/first ingredient. However, when you turn the box around to read the Food and Drug Administration’s (FDA) required nutrition and ingredient labeling, there’s often an unsettling surprise.

Many products that promote themselves as being made from “whole grain” actually contain very little whole grain. Instead, their primary ingredient is refined flour, “a pulverized version of what may, at some point, have been a whole grain.” Whole grain contains every part of a grain kernel, “the bran, the germ and the endosperm (the inner most part of the kernel),” whereas the process of refining flour often involves “stripping off the outer layer, where the [more nutritious] fiber is located.”

How is this potentially misleading labeling allowed? Many blame lax directives by the FDA, which last issued “draft guidance on whole grain labeling in 2006.” The FDA, which regulates food labeling, continues to allow food manufacturers to print “whole grain” on the front of their packages without any absolute or relative reference information, i.e., how many grams of whole grain the product contains or how much whole grain there is relative to refined flour.

But, does printing “whole grain” on the front of a food package really deceive consumers? Several significant stakeholder groups believe it does. The Academy of Nutrition and Dietetics has advised the FDA to “require firms to disclose either the percentage of whole grains and refined grains on pack, or the grams of both refined and whole grains per serving.” Similarly, the Center for Science in the Public Interest (CSPI), a Washington DC-based consumer advocacy group, has “urged the agency to make whole grain labeling clearer to consumers.”

Whole grain labeling becomes even more confusing when it appears on “hearty-looking, and sometimes artificially colored,” food items like multigrain or wheat bread. Such mismatched visuals are especially misleading for the elderly.

But, as consumers, don’t we bear responsibility for what we place into our grocery carts and eventually into our mouths? All we need to do is turn the package around and read the FDA-mandated list of ingredients to see where whole grain ranks into the mix.

Consumers should be expected to act rationally and make logical interpretations about product labeling. However, according to the Federal Trade Commission (FTC), it’s unfair to subject people to deceptive messages that a “reasonable consumer” would find misleading. Courts have applied this reasonable consumer standard in ruling against those employing whole grain deception.

The most notable litigation likely has involved one of the best-known snack crackers, Cheez-It, the product of one of the world’s leading food manufacturers--Kellogg’s. In December of 2018, a second circuit appeals court ruled against the packaged-goods icon in a class action lawsuit that claimed deceptive labeling on “Whole Grain” Cheez-Its, a relatively new extension to the company’s flourishing cracker line.

Printed on the front of the box, in large letters, is the phrase “WHOLE GRAIN.” Above those words, in a much smaller font, are the words “MADE WITH.” Meanwhile, a very big (4.5” x 4.5”) and unusually dark Cheez-It serves as a background image. Despite those distinct package design elements, which are very different than those of Original Cheez-Its, when one turns both boxes to the side, the nutrition facts for each list “enriched flour,” not whole grain, as the first ingredient.

It’s not surprising, therefore, that the second circuit appeals court agreed with the consumer plaintiffs, issuing a unanimous decision that said the whole grain cracker’s nutrition facts “contradict, rather than confirm, [Kellogg’s] ‘whole grain’ representations on the front of the box.”

Kellogg’s effort to include more whole grain in its crackers is good in that “scores of studies link the amount of whole grain [people consume] to better health.” So, the 8 grams of whole grain found in a serving of Cheez-Its can help get people closer to the target daily intake of 48 grams of whole grains for adults.

The problem, however, is that when the front of a package promotes “WHOLE GRAIN” in large letters, against a dark background, it’s reasonable for consumers to conclude that the product’s principal ingredient is whole grain. People might even presume that the crackers are somehow healthy, which is a hard argument to make for any snack cracker, including Cheez-Its, which have the following daily values: total fat–10%, saturated fat–8%, sodium–10%, and total carbohydrates–6%.

Consumers should read the labels and exercise good judgment for the products they use. However, food marketers also should help people make right choices and not mislead them with mixed messages on product packages. Their continued prevalence on supermarket shelves suggests that Kellogg’s Whole Grain Cheez-Its are a success, but the cracker's first ingredient really is “Single-Minded Marketing.”

Subscribe to Mindful Matters blog.
Learn more about the Mindful Matrix and Mindful Meter.
Check out Mindful Marketing Ads and Vote your Mind!

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Just Blew It

Whole Grain Isn't the Whole Story

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