WRITTEN EXECUTIVE COMMUNICATION

Report: The Nike Satan Shoes Crisis

Group 5

1. Abhinav Verma - MBA23104

2. Aman Kumar - MBA23108
3. Ansh Kumar Gupta - MBA23110
4. Hansraj Verma - MBA23123
5. Vanshika Soni - MBA23150
6. Kotesh Babu K. - MBATM23025
CONTENTS…

S.No. Particulars
1 Overview
2 Crisis at glance
3 Public Reaction and Effects On Brand
Image
4 Nike’s Response And Strategy
5 Impact On Shareholder
6 Research Methodology
7 Legal Battles
8 Implication
9 Conclusion

OVERVIEW
The "Satan Shoes" were created in partnership between MSCHF and rapper Lil Nas X
after the latter's contentious music video for "MONTERO (Call Me By Your Name)" was
released. In addition to a pentagram necklace and a reference to Luke 10:18, a biblical
passage concerning Satan's descent from heaven, the shoes were reportedly filled with
a drop of human blood mixed with red ink in the sole. They were reportedly modified
Nike Air Max 97 trainers.

Due to numerous recommendations, the market is ablaze with both positive and
negative reviews following the product's launch. Some of the additional points for the
same are:

1. Limited Edition :
The “Satan Shoes” were released as a limited edition shoe in the shoe market, with only
666 pairs available for purchase.

2. MSCHF’s Artistic Intent:

The project is being carried out by the art collective MSCHF, which is known for
producing attractive art that contains some meaning. They clarified that the "Satan
Shoes" were not meant to be a serious theological declaration but rather a form of
artistic expression and societal commentary.

3. Artist Involvement:
The company's collaboration with rapper Lil Nas X, who is openly gay, added some
more controversy. While the music video “MONTERO” stated many scenes where the
rapper is depicting some provocative scenes.

4. Nike’s Lawsuit:
Nike said that the release of the "Satan Shoes" may damage the company's reputation
and brand; therefore, it filed a lawsuit against MSCHF for trademark infringement. The
lawsuit emphasized how Nike's patented design for the Air Max 97 was used without
authorization.

CRISIS AT A GLANCE
When the limited edition "Satan Shoes" were released, there was a lot of controversy
surrounding them. The shoes stir up controversy because of their contentious themes
and design, which have offended many groups with strong religious beliefs. Some of the
crisis which arose during the launch of the shoes are :

1. Collaboration and Design:

MSCHF and Lil Nas X collaborated to develop the "Satan Shoes" after the public
release of his contentious music video for the song "MONTERO (Call Me By Your
Name)." The shoes had a pentagram necklace, references to Satan, and a purported
drop of human blood mixed with red ink in the sole, among other unusual features.

2. Public and Religious Backlash:

When the "Satan Shoes" were released, there was a lot of response and controversy,
especially from religious organizations and those who thought the design was
sacrilegious and obscene.

3. Legal Action and Settlement:

Nike filed a lawsuit against MSCHF with the intention of defending its trademark and
brand. Following a settlement agreement between the parties, MSCHF promised to
recall and buy back the "Satan Shoes" from consumers.

4. Social Media Impact:

People's ideas about artistic expression, free speech, and the suitability of the design
were all hotly debated on social media platforms as a result of the dispute.

5. Cultural and Artistic Commentary:

Rather than making a serious theological statement, MSCHF characterized the initiative
as a form of creative expression and social commentary. The team is renowned for
producing thought-provoking and contentious artwork.

These are some pointers for the controversy that arose during the launch of the “Satan
Shoes”. As there were many issues which were affecting the brand image of Nike in the
shoe market and was affecting their customer engagement and profit scenarios.

PUBLIC REACTION AND EFFECTS ON BRAND IMAGE

The public's response to the release of the Satan shoes was not uniform. Because of
the religious connotation and the use of human blood in the shoes, some individuals
considered it disgusting and controversial, while others regarded it as a unique
cooperation and a form of artistic expression.

Nike was not directly engaged in the creation of the modified sneakers, yet the business
still suffered reaction and criticism in response to the incident. A large number of people
called for a boycott of Nike products and voiced their disgust on social media. The
brand's name being connected to a product that offended and went against their morals
infuriated some customers.

1. Negative Public Opinion: The public's opinion of Nike was tarnished by its affiliation
with the contentious Satan Shoes. Some were offended by the personalization and
angry that Nike's name was associated with a product that they felt was improper or
disrespectful.

2. Boycott Calls: On social media, there had been calls for a boycott of Nike
merchandise. Customers who were upset over the Satan Shoes scandal encouraged
others to quit buying Nike products as a way to vent their resentment.

3. Long-Term Effect: As the dispute faded from the news, it's possible that the effect
on Nike's brand image reduced over time. Nike's continued marketing and community
involvement initiatives, in addition to its well-established worldwide presence, probably
contributed to the brand's resilience.

A company's brand can be affected by issues such as the ‘Satan Shoes’ incident in a
complex and multifaceted way, with different consumer groups having different
perspectives. Companies usually take a multipronged approach in response, reflecting
on their adherence to basic values and drawing lessons from similar situations. The
goal of this approach is to regain credibility and confidence. Acknowledging the intricacy
of these circumstances, businesses frequently adopt calculated measures to resolve
issues and preserve a favorable reputation for their brands over time.

NIKE’S RESPONSE AND STRATEGY

1. Public Denial and Distancing: Nike swiftly issued a public denial and distanced
itself from the Satan Shoes, stating that it did not create or distribute the modified item.
The public rejection was essential in establishing that Nike had not approved nor
endorsed the contentious changes.

2. Communication and Transparency: Nike used press releases and public remarks
to convey its position on the issue. The company made a point of being open and
honest about its commitment to respecting different faiths and its lack of involvement in
the customisation.

3. Settlement and Recall: Nike and MSCHF were able to reach a settlement for their
legal dispute. MSCHF consented to a voluntary recall of the Satan Shoes as part of the
settlement, further separating the contentious item from the Nike name.

4. Reiteration of Core Values: Nike has reaffirmed their commitment to diversity and
tolerance for a range of views throughout the dispute. The business stressed how
committed it is to upholding a welcoming and pleasant brand image.

RESEARCH METHODOLOGY
1. Research Problem: The controversy surrounding the release of "Satan Shoes"
highlights a research problem: understanding the impact of provocative artistic
expressions on societal norms, religious sensitivities, and public discourse. Examining
the implications of such products on cultural and religious sentiments is crucial for
exploring the dynamics of artistic freedom and societal boundaries in a diverse and
interconnected context.

2. Research Objectives:
● Analyze the reactions of different groups to the shoes, including religious
communities, consumers, and the media.
● Investigate the impact of the controversy on the brand image of MSCHF and
Nike.
● Evaluate the effectiveness of MSCHF's crisis management strategy.

3. Sampling: Target population:

Consumers aged 18-35 who are active social media users and regular consumers of
Nike or its competitors.
Sampling method: Stratified random sampling based on demographics (age, gender,
ethnicity)

Sample size: 300-400 participants

4. Data Collection Methods:

Quantitative survey: Online or mobile surveys with multiple-choice, Likert scale,
and open-ended questions to gather data on brand image, social norms , and
ad perception.

5. Analysis Framework:

Descriptive statistics: Analyze quantitative data to summarize key metrics like

brand image scores, purchase intent changes, and demographic breakdowns of
ad perception.

Impact on different shareholders

The failure of the Satan shoes by Nike can have varying impacts on different
stakeholders:

1. Shareholders:
Negative Impact: Shareholders may experience a short-term decline in the stock value
due to controversies and potential boycotts. However, long-term impact depends on
Nike's crisis management and ability to restore public trust.

2. Customers:
Diverse Reactions: Some customers may be offended and choose to boycott Nike,
impacting sales. Others might appreciate the creative expression or view it as a non-
issue, maintaining their loyalty.

3. Employees:
Internal Morale: The controversy may affect employee morale, especially if they feel
the company's values are compromised. Clear communication and measures to
address concerns can mitigate internal repercussions.
4. Suppliers:
Potential Concerns: Suppliers may face uncertainty if the controversy affects Nike's
production or sales. Open communication and reassurance from Nike can help alleviate
concerns within the supply chain.
Retailers:

Sales Impact: Retailers selling Nike products may experience shifts in consumer
behavior. A drop in demand for Nike items could affect sales and inventory
management for these retailers.

5. Competitors:
Opportunity or Challenge: Competitors might seize the opportunity to attract
dissatisfied Nike customers. However, they could also face challenges if controversies
in the industry lead to heightened scrutiny overall.

7. Legal and Regulatory Bodies:

Potential Scrutiny: Regulatory bodies may scrutinize the incident, especially if it raises
legal or ethical concerns. Nike might face investigations or regulatory actions, impacting
its operations.

8. Social Activists and Advocacy Groups:

Opportunity for Advocacy: Activists may leverage the controversy to advocate for
more responsible business practices. They might call for transparency, ethical
considerations, and accountability in corporate decisions.

The impact on stakeholders varies, ranging from immediate financial repercussions for
shareholders to potential long-term effects on brand reputation and relationships with
customers, employees, and other entities within Nike's ecosystem. Effectively managing
the fallout through communication, transparency, and corrective actions will be crucial
for mitigating the overall impact.

Legal Battles

1. Temporary Restraining Order (TRO):

 ● A court issued a temporary restraining order to halt the sales of the controversial
"Satan Shoes."
● This legal action was likely initiated by Nike, who were not involved in the
creation of the modified shoes and objected to their association with their brand.

2. Legal Negotiations and Settlements:

● Nike and MSCHF, the company responsible for creating the Satan Shoes,
engaged in legal negotiations to resolve the dispute.
● Both parties sought a resolution rather than a prolonged legal battle, which is
common in intellectual property and trademark disputes.

3. Recall of Controversial Shoes:

● As a result of the settlement, a decision was made for the recall of the Satan
Shoes from the market.
● This action indicated a compromise between Nike and MSCHF, possibly
involving modifications to the design or discontinuation of the product.

4. Refunds to Customers:

● In the settlement, it was agreed that customers who had purchased the modified
shoes would be offered refunds.
● This reflects an attempt to address any potential harm caused by the
controversial nature of the product and the legal issues surrounding it.

5. Legal Complexities in Artistic Collaborations and Trademark Rights:

● The entire case underscored the legal complexities that can arise in artistic
collaborations, especially when intellectual property rights, such as trademarks,
are involved.
● Artists and collaborators need to be mindful of potential legal implications and
respect established trademarks to avoid legal challenges.

The legal battle involving Nike and MSCHF over the Satan Shoes brought attention to
the intersection of artistic expression and trademark rights, ultimately leading to a
settlement that included a recall of the controversial shoes and refunds for customers.
This case serves as an example of how legal complexities can arise in the evolving
landscape of creative collaborations and intellectual property law.
IMPLICATION
The Nike Satan Shoes crisis had several significant implications, both for Nike and for
the broader cultural landscape. Here are some of the key points to consider:

For Nike:

Brand damage: The crisis significantly damaged Nike's brand image, particularly
among consumers with strong religious beliefs. Many felt that Nike had endorsed or
condoned offensive and blasphemous content.

Loss of trust: The controversy shook public trust in Nike's judgment and its
commitment to ethical marketing practices.

Financial impact: The crisis led to a decline in Nike's stock price and potentially
impacted sales.

Legal challenges: Nike was forced to engage in costly legal battles with MSCHF,
diverting resources and attention from other business priorities.

For broader culture:

Sparked debate about free speech: The crisis brought to the forefront the debate
about the boundaries of free speech and religious expression.

Highlighted religious sensitivities: The controversy underscored the importance of

respecting diverse religious beliefs and avoiding offense.

Increased polarization: The crisis contributed to a climate of cultural and political

polarization, with individuals becoming increasingly divided along ideological lines.

Impact on marketing practices: The crisis served as a cautionary tale for marketers,
highlighting the risks associated with using sensitive themes and imagery.

Conclusion

1. Clashes Between Art, Business, and Society:

The controversy surrounding the Satan Shoes brought to the forefront the inherent
clashes between artistic expression, commercial interests, and societal values. The
incident triggered debates on whether certain forms of creativity can go beyond societal
norms and how businesses should navigate such conflicts.

2. Questions about Creative Freedom and Corporate Involvement:

The case prompted fundamental questions about the extent of creative freedom in the
commercial sphere. It raised concerns about the responsibility of companies when
collaborating with artists and the potential consequences when artistic expression
clashes with public sentiments and values.

3. Need for Clear Ethical Guidelines:

The controversy underscored the importance of establishing and adhering to clear
ethical guidelines in artist-company collaborations. Defining boundaries for responsible
creativity becomes crucial to ensure that artistic expression aligns with ethical
standards, minimizing the risk of public backlash.

4. Defining Boundaries for Responsible Creativity:

The case emphasized the necessity of setting boundaries in the realm of responsible
creativity. Establishing guidelines ensures that artistic collaborations align with ethical,
legal, and social considerations. This not only protects the interests of the involved
parties but also maintains trust with the wider audience.

5. Importance of Mutual Understanding and Responsibility:

The incident highlighted the critical role of mutual understanding and responsibility
between artists and companies. Successful collaborations require a shared commitment
to ethical standards, respecting societal values, and a careful consideration of potential
implications on both artistic expression and corporate reputation.

In conclusion, the Satan Shoes controversy serves as a poignant case study illustrating
the complex interplay between art, business, and society. It underscores the need for a
balanced approach that respects creative freedom while acknowledging the ethical
responsibilities of both artists and companies in navigating the intricate landscape of
artistic collaborations.
**********