Consumer Engagement: Nike’s Ethical Shortcomings

Nike is a company that I have researched for courses in the past, and this term I’m digging deeper into their marketing tactics, ethical issues, and how they engaged their consumers during and after the crisis. I’m going to share my thoughts as well on what the implications of these allegations were on Nike’s brand and what I believe they could have done differently from a marketer’s perspective.

The Allegations

In 1996, Time Magazine published an article exposing Nike’s secret to making international trade work for their booming business – they were, allegedly, not treating workers fairly. This included allegations of children creating products in sweatshops, the company not paying livable wages even for the countries their factories were in, and the rushed, low-quality production of their products. Nike was not the only company that was exposed in this article, however their consumers took note immediately. The news spread and the New York Times published more information about these allegations that same year (Nike: Managing ethical missteps—sweatshops to leadership, n.d.).

How Did Nike’s Consumers React?

Nike’s consumers did not take the news lightly. Amongst protests from consumers, brands started to retract deals with Nike. According to Harbert University’s report: “Nike revenues and stock prices decreased by approximately 50 percent, and the company laid off 1,600 workers,” (Nike: Managing ethical missteps—sweatshops to leadership, n.d.). The media reported widely on these speculations and this only added proverbial fuel to the fire. Nike needed to address these criticisms properly and promptly if they wanted to return to being the largest, most loved athletic wear company that they once were.

How Nike Addressed The Situation

So, how did Nike address the situation? They began by taking a look at their products and eliminating toxic materials used such as toluene. This was often used in the creation of shoes and can irritate the workers who were creating Nike’s products, especially in under-ventilated, crowded rooms. In addition to this, Nike had to look at all their factories and find where they could improve. This included but was not limited to raising the minimum factory age to 18, revamping their global factories to meet OSHA guidelines, and introducing free education programs to their employees.

According to Nike’s website in 2024, “Over the years, we have defined a clear roadmap for achieving world-class safety performance, tested and piloted programs to create advanced health and safety management systems, and developed new tools to measure individual competencies and leadership capabilities that enable a mature culture of health and safety in the workplace,” (Supporting Supply Chain Health and Safety, n.d.).

A Marketing Perspective

While Nike has taken numerous steps to reestablish themselves in the athletic apparel industry, there are recommendations that I would make. I believe that with their website’s reports should come acknowledgment of the previously mentioned allegations, and they should be transparent with their audience. This can flow into their social media campaigns and enhance the way they interact with their consumers. Nike can also introduce a new campaign about bettering the planet and their workers’ conditions – the happier workers are the more they can produce and get back in the good graces of consumers.

Overall, I feel Nike did a good job addressing their controversies and could improve on their transparency in marketing. Consumers want real, down-to-earth people behind the business – not a faceless corporation. Nike can move forward and recognize that without changing their past, they can make up for it in the present and future.

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