Brand Disasters - Made in China
Brands have historically been careful to avoid any intersection with political activism. When they do try to capitalize on a moment, the results can be disastrous. Remember when Kendall Jenner tried to cure the Black Lives Matter movement with a can of Pepsi?
That's why the recent wave of confrontations with China have been so fascinating to watch. Brand after brand have attempted to navigate the complexities of maintaining a productive relationship with a country in the midst of a human rights crisis. We've seen this uneasy interaction play out with a number of brands, including the NBA. There are a few useful lessons we can learn from the NBA’s response when they were challenged.
AN AMERICAN IN A CHINA SHOP
Western brands have found success in China in recent years, despite the country's poor record on human rights and the ongoing control of state media. China has the world's second largest GDP, making it an irresistible market for internationally-minded brands.
The cost of entering this market is orthodoxy. China demands deference. They won't work with companies that contradict the party line. In response, businesses have compartmentalized China's state-dictated political and speech restrictions, viewing them as the cost of doing business. The prevailing attitude has been pragmatism in order to enter an enormous market full of opportunity.
ALL THE TROUBLE IN CHINA
The primary trigger for the recent conflict is the protests in Hong Kong. Without getting into too much detail, Hong Kong exists a little outside of established Chinese law, and enjoys a special status due to its history. China's recent attempt to subject Hong Kong's citizens to the same authoritarian laws that govern the rest of the Chinese people has resulted in months of record-breaking protests. Hong Kong wants democracy, and they’ve been vocal about it.
These recent incidents do nothing to help China’s image on the world stage, especially given their reputation for human rights violations over the past 50 years.
PERSONAL FOUL
The eagerness of American companies to enter the Chinese market has resulted in incredible success - but the hidden cost of appeasing the “Red Dragon” has become more apparent than ever. The NBA has an estimated 500 million fans in China, and their business there is worth over $4 billion according to Forbes. Also, individual players have their brands inextricably linked to the NBA, increasing the stakes. Now they’re neck-deep in a brand catastrophe that doesn’t seem to be going away.
Houston Rockets General Manager Daryl Morey tweeted a message in support of Hong Kong. China responded furiously with a media ban on Rockets games and condemnation of Morey. Rockets owner Tilman Fertitta also expressed disapproval of Morey’s tweet. Morey retracted his message two days later, but the damage had been done.
The NBA released a statement that attempted to bridge the divide without taking too strong of a stance, which brought them wide criticism in America for apparently kowtowing to Chinese bullying. In China, they issued a different statement that was more critical of Morey, but still deemed inadequate for its refusal to explicitly acknowledge Chinese sovereignty over Hong Kong.
Finally, a subsequent statement from the NBA dug the hole deeper with a half-hearted recognition of “… different political beliefs.” NBA commissioner Adam Silver further added to the controversy by accusing the Chinese of pressuring the NBA to fire Morey. Members of Congress have weighed in with rare bipartisan support for standing up to China’s pressure. Meanwhile, fans continue to attend games with pro-Hong Kong signs and t-shirts.
So what could they have done differently?
BROKEN BRAND PROMISE
The NBA took their eye off the ball when they began working in China. Their brand was built on an emotional narrative with roots in a uniquely American mindset. The NBA is all about the power of an individual to succeed with talent and hard work, and the power of a team to succeed with a great strategy built on the singular strengths of its players. Their brand promises customers that they’ll be just as powerful, popular, athletic, and successful as the players - but without sacrificing the ideals that made them successful.
Refusing to support Hong Kong’s struggle for democracy violates what the NBA’s original brand promise was all about. It’s a betrayal of the fundamental nature of the NBA, and the fans can sense that. By flip-flopping and trying to please both sides, the NBA led itself to a place where nobody was happy.
LESSONS TO LEARN
No brand exists in a vacuum. They’re all connected to the real world in a million little ways, and every touchpoint matters. Every person who represents the brand is an embodiment of that brand. For the NBA, that means sponsors, players, venue managers, agents, business partners, and yes, management.
Somewhere in their expansion overseas, the NBA brand became misaligned. Different members of the organization began delivering on different versions of that message. Morey’s original tweet was messaging for an organization that has changed substantially. The NBA didn’t fully anticipate the cultural, geographic, and ethical differences that arise from global expansion.
There’s no easy way out of this dilemma. They can’t roll back the clock, so their best move is to mitigate potential threats to the brand in the future. What’s hurting them here is brand misalignment. They need to explicitly communicate their brand values to everyone in their organization. That communication will rely on having a firm idea of what those brand values are.
The NBA will continue to lose the trust of their fans - both American and Chinese - if they don’t work to align their brand and message. Right now, they can’t even align their apologies.
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