Nike Jordan Marketing Intelligence Report Kayleigh Fyfe | 12032909 | Scanning The Digital Environment Introduction The purpose of this report is to provide marketing intelligence on the sports brand „Nike‟, and its sub brand „Jordan‟. The report will analyse the organisations environment and highlight factors which may affect the planning and implementation of a digital marketing strategy. This is an undirected viewing of the brands online environment within the US market place. The report aims to identify the customer‟s needs and wants, anticipate any arising problems or trends, and to provide direction for the brand to increase customer satisfaction from a digital perspective. Micro Environment The Customer The Nike Jordan consumer is predominately male; though products are available for women, girls and boys the wider range is not designed for them. This is evident when comparing the general internet population to the audience Nike reaches. Figure 1 identifies the male gender between the ages 25-34 as Nike‟s largest audience. Figure 1 also displays that the age range 18-24 is above the internet average for this reason this report will concentrate on the millennial males within the US. Marco Environment Summary Goldman Sachs (2012) reports that the Millennial generation had the largest population in US history at 92 million. Millennials came of age within a time of digital and technological transformation, making them “the first generation of digital natives and their affinity for technology helps shape how they shop.” (Goldman Sachs, 2012) The Millennials online consumption is higher than the Non-Millennial. The way in which they interact with brands has moved away from the typical marketing avenues such as TV and Radio. The masses are embracing mobile devices so marketing channels have expanded to online advertising text messaging, social media and mobile apps to name but a few. Appendix A displays the digital platforms and the usage from both Millennials and Non-Millennials The digital world allows for the consumer to have more information to hand that assists them in their buying decisions. The transparency of brands product, quality, price and service are imperative factors that Millennials consider before committing to a purchase. Figure 2 displays how the digital natives actively seek out more information than other audiences. The information that is readily available for the consumer can be outside of the brands control. “Millennials are talking about products and services online, being influenced and influencing others. This generation considers the opinions of fellow consumers to be more credible than traditional advertising.” (Taken Smith, 2012) They are a generation that is no longer swayed solely by the marketing message, word of mouth and consumer reviews are an important aspect to consider. Competitive Position The Porter Five Forces model identifies the competitive forces within the industry that affect a company‟s profitability. Figure 3 highlights the five basic forces and the state of Nike Jordan‟s competition. The above analysis draws attention to three main factors that present both a moderate and strong force. Threat of Substitute Products - The internet allows customers to have more access to information and source competitively priced substitutes. Nike Jordan‟s target audience are actively seeking this information and though Jordan have a strong brand presence, loyalty to brands are no longer a dominating factor for the Millennial consumer. Goldman Sachs (2012) reported that only 8% of 25-34 year olds surveyed strongly agreed with the statement „When I shop, I always try to buy branded products‟. Figure 4 shows that in comparison to the Non-Millennial, price has a significant influence on their purchase decision. Bargaining Power of Buyers - Not only are the consumers searching for value but since the digital age they now have a new set of expectations when it comes to the digital experience. Appendix A reveals that both Millennial‟s and Non-Millennial‟s are using branded apps to receive marketing messages and make their purchases. It‟s imperative that functionality and ease of use if of a high standard for all Nike‟s online asset‟s. In a site overview from Alexa.com (2016) 51% of websites loaded faster then Nike.com. However, the internet also provides Nike Jordan with a global platform to market their goods and continue to increase the amount of individual buyer‟s. Engage % Active Hurdle Rate Fan Engagement Repeat Conversion Convert Conversion Rates Leads and Sales Revenue and Margin Act Bounce Rate - 27.08 Avg. Pages per Visit - 8.49 Avg. Visit Duration - 4.43m Reach Audience Share - 68% Category rank - #1 This report focused on three competitors offering similar basketball products and analysed their digital platforms and usage. Adidas, Reebok and Under Armour were the chosen competitors. Figure 5 is adapted from Smart Insights (2010) RACE planning framework and included figures that were readily available about Nike.com in order to benchmark themselves against the competition. Nike.com performs well and dominates the audience share out of competitor‟s domains. Similar Web (2016) identifies that within the sports shopping category the website it ranked number one in the US, with its nearest Rivalry Among Existing Competitors - The digital environment allows an existing brand to easily launch new products, connect and become closer with the customer without the physical assets such as stores. competitor Under Armour ranking at number nine. There are however some aspects where Nike are under performing, traffic sources displayed in Figure 6 and 7 show they under perform in generating leads from both social networks and referrals. We identified earlier that Millennial‟s utilise social media sites for product reviews, to be under performing in these areas is troubling. A key trend that Nike Jordan is also missing is coupons and rewards.“Millennial‟s are likely to purchase more from, feel more loyal to and tell their networks about brands that offer reward incentives.” (Ferguson, 2012) Figure 7 identifies Under Armour as a strong performer when gathering traffic through these avenues. Intermediaries Chaffey and Smith (2013) recognises that intermediaries can have help drive traffic through to an organisations website. Though it is important to note that some of Nike Jordan intermediaries are retailers, where the sale will start and end outside of Nike.com domain. Appendix B displays Nike as being the top online athletic shoe merchant in the US holding 31.7% of the market share. However its displays in second and third position are retailers Amazon and Zappos.com both of which not only stock Nike Jordan„s but products from the competitors. Similar Web (2016) website analysis indicates that both of these retailers audience visit time is longer and they view more pages. Polictical • Social media blocked in some countries Economic • Economic crash in US • Price comparison websites Social • The acceptance and appreciation of different cultures • Different cities support different teams and players Technological • Big data • Cross channel marketing • Pay options expanision Legal • Data protection • Copyright infringement • Paid bloggers disclosing promotion of product Enviromental • Paperless • Green IT Nike Jordan Strengths – S Strong brand affiliates Existing customer Base Brand perception Weaknesses – W Intermediaries Cross channel marketing Social media Slower interface Opportunities – O Traffic source expansion Reward or coupon scheme New wearable product SO strategies 1. Create rewards those who review products 2. Refine remarketing strategy through email and web 3. Launch wearable products through sub brand Jordan to provide access to big data WO strategies 1. Introduce reward scheme for app users only 2. Refine social media strategy to increase click through rate Threats –T Aggressive competition New competitive products ST strategies 1. Utilise brand affiliates to reengage audience 2. Add value to product purchases WT strategies 1. Improve web speed and functionality 2. Increase social media presence 3. Integrate sub brand Jordan effectively on Nike platforms Nike Jordan is not only influenced by internal environment but the external environment has several factors that can affect their digital approach. Figure 8 highlights those factors and identifies some of the obstacles there to face. Social – A factor to consider here is that the US basketball teams fan base is not just because of their success but their location. Slice Intelligence (2016) identifies the top four NBA player shoes as Nike Air Jordan, Nike Kobe, Nike Lebron and Under Armour Curry. Appendix C displays how team preference can shape the products demand and affect the online revenue from city to city. Jordan is shown to dominate New York and Los Angeles but rival Under Armour, hold the market share in San Francisco by almost 10%. Technological – Wearable “gadgets are rapidly multiplying, and within five years there could be half a billion devices strapped onto, or even embedded in, human bodies.” (Austin, 2015) Nike have a number of different wearable products on offer including Nike + Basketball, though not yet embedded in the sub brand Jordan it is still a focus for the future if they are to stay ahead of competitors. Data captured from these gadgets could provide insights that allow for more targeted marketing messages but as Austin (2015) acknowledges there are security issues with the privacy of the data collected and this could in turn breach the legal requirements of data protection. Economical – Nike Jordan‟s target audience are earning less than other generations. Ferguson (2012), reports that 34% of Millennial‟s earn under $25,000 a year. However, they are still spending contributing $600 billion “to the $6.5 trillion spent annually by US consumers.” (Ferguson, 2012) Rather than considering price comparison as a want from this generation Nike should consider this as a need for them to fulfil purchase in the given climate. The objective of this report was to provide marketing intelligence on the Nike Jordan brand and analyse both the micro and macro environment. The SWOT analysis shown in Figure 9 identifies the brands strengths and weaknesses whilst highlighting attractive opportunities to move the brand into an even stronger competitive position. The recommendations made in the study combat the threats the business faces whilst leveraging and building strengths. Word count 1493 Figure . 1 Nike.com audience demographic Alexa (2016) Figure. 2 Comparison between US Millennial’s and Non – Millennial’s seeking out product review information. Ferguson (2012) Figure. 4 Comparison between US Millennial’s and Non – Millennial’s and which factors make them loyal to a brand. Goldman Sachs (2012) Figure. 3 Adapted from Porter (2008) five forces framework to include Nike Jordan current competitive position. Figure . 5 Adapted from Chaffey and Smith (2013) RACE framework to include Nike.com domain statistic. Figure. 6 Comparison of Nike.com and its competitors traffic source statistics from social networks. Similar Web (2016) Figure. 7 Comparison of Nike.com and its competitors traffic source statistics from referral sites. Similar Web (2016) Figure. 8 PESTLE analysis of the Marco environment Figure. 9 SWOT analysis of the Nike Jordan brands digital environment