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Jordan Brand Losing its Luster
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02/14/2012


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Published by  on February 14th, 2012

Michael Jordan.

MJ wearing the famous Air Jordan 11 Concords

What comes to mind when you read or hear that name?

Some would think “The greatest basketball player of all time”, “A true champion”, “6 NBA Championships”, “An ambassador of the game of basketball”, “he never seemed to lose”. Others might think, “I hated him”, “He got away with everything”, “the NBA catered to him”, etc. You either loved him or you hated him (because he won so often).

When you read/hear that name, what comes to mind?

Would you think of sneakers? Specifically, Air Jordan basketball shoes? A lot of people don’t.

Jordan Brand (JB), a subsidiary of Nike, is just that – a brand. It’s a company where Michael Jordan has final approval on all products produced with his name and/or likeness and, primarily, produces basketball shoes (“Air Jordans” and “Team Jordans”), Jordan clothing lines (called Jordan “Lifestyle” clothing) and Jordan basketball accessories (basketballs, wrist bands, workout gear, etc.).

So, why am I writing about this? What does it have to do with anything regarding branding?

The erosion of Michael Jordan’s once stellar brand is why.

Jordan Brand, the company, is raking in revenue at over $1 billion annually and dominates it’s market. As a matter of fact, 3 out of every 4 pairs of basketball shoes sold in this country are Jordan Brand, on top of that which 86.5% of all basketball shoes over $100 that are sold are Jordan Brand.

And, Jordan Brand has a 10.8 percent share of the overall U.S. shoe market, which makes it the second biggest brand in the country (behind only it’s parent company, Nike) and more than twice the size of Adidas’ share, JB’s closest competitor.

Erosion? Where is the erosion when Michael Jordan’s company has such a huge market share and is now over $1 billion in annual revenues?

The erosion is in the Brand experience and product quality.

The Jordan Brand is beginning to see some tarnish.

Though the brand has diversified from just basketball shoes (sneakers), sneakers are still the primary product for which Jordan Brand is known. With the release of most sneakers from JB, there isn’t much commotion. Yet, there are those loyal to the Brand that will always look forward to a particular, more popular and desired “signature” pair release.

However, when customers line up and “camp out” anywhere from 12 hours to 2-3 days before the stores sell them, when people trample each other to the point of injury, when physical structures are damaged in the race through the doors to get to the store first and, finally, someone is robbed of those shoes outside moments after buying a popular pair of Air Jordans – then the Brand experience begins to erode the Brand itself.

A closer detail view of the Air Jordan XI “Concords”This occurred just this past December right before the Christmas holiday with the release of the Air Jordan 11 “Concords”. Not in one city – it happened in several cities across the country.

Intermittently, this has been going on since the late 80’s and early 90’s. In 1990, Sports Illustrated ran a cover story titled “Your Sneakers or Your Life” as kids and young adults were robbing and, in some cases, literally killing each other for a pair of “Jordans” or other athletically related apparel. When interviewed about this, Michael Jordan expressed his honest disbelief and sadness, yet didn’t really have much to say as far as a position on what was happening with the purchase of his shoes or any serious initiative to abate it in any strategic or tactical manner.

Is this strictly a Jordan Brand issue? Of course not. Jordan Brand is not the true cause of such societal behavior. It is a much larger issue.

It seems the story's extremes had <br>diminished, yet now are <br>beginning to resurface again.

Nevertheless, the company could be more proactive in minimizing the occurrences of such zealous behavior and potential acts of crime when it has the power to do so – and earn serious brand credibility along the way.

Such as, rather than produce a “limited” amount of sneakers for release, produce a higher amount of sneakers so the majority of customers can get their pair without such chaos. That’s a positive step towards good brand management – and, likely, higher volume sales.

Why not show a more positive brand effort and reduce the price and profit margin just for “Retro” sneakers in particular? Make your higher margins on other premium products. I know why they won’t do that. It’s because “Retro” sneakers (a re-release of a previously produced sneaker) are, virtually, pure profit. And, very lucrative.

The fact that the “Retro” sneakers have zero research and development costs (it’s the same shoe that was released a long time ago), nearly zero advertising costs (their audience finds out online with little advertising) and the lesser quality materials from which the shoes are made (to squeeze out higher profit margins versus when the shoes were originally released) creates the thought of being ripped off for what I’m getting and potentially risking injury from the shoes falling apart in performance situations (versus holding up well like the originals).

And, they’re still $150 – 180? Let’s not forget tax, which can push your out-of-pocket cost to $195 – $200 at the higher end. Doesn’t that scream profit margin over product performance and quality?

But, these ideas wouldn’t create the free hype and demand that JB wants in order to sell out and maintain such high price points. That says they care more about shareholders than the customers that buy their products and keep them in business. The loyalty rests with the customers that continue to buy products. Shareholder loyalty is with profit only – and that’s not true loyalty as they will come and go with the money.

So, towards whom should Jordan Brand show its allegiance? Those investors that will come and go with only monetary return as their motive or those customers that stay with you, buy your products, keep you in business and are loyal to your Brand promise?

Remember, the value of your company is based upon future sales from your customers, not from shareholders with whims of investing or not.

We’re now seeing local television stations, that never even knew about the sneaker culture in the past, being made more aware of these particular Air Jordan “release days”, cover local areas where the sneakers are sold and then leading their broadcasts with it as a top story.

Why? Because it’s now about the negativity of the event with it’s potential dramatic crime aspect or the overzealous mindset of the customers ending in injuries reminiscent of human stampedes on “Black Friday”.

If this was your Brand and the media began to cover your product introductions more for the negativity of customer behavior than for the product itself, would you address it to diffuse these negative occurrences or would you let it continue for the sake of free publicity and higher profits and allowing the negative association with you and your products? What do you think that experience does for your Brand?

Does anyone remember British Petroleum (BP)? Enron? Lehman Brothers? Toyota and their initial denials about their vehicle accelerator pedals? All of these brands were not or have not been living up to their Brand promise – and look what happened to them. Either out of business entirely or a brand that the public does not trust.

It’s coming Jordan Brand. Are you paying attention?

Let’s summarize the Brand experience with Michael Jordan’s company (and products) through the average person’s perspective:

If I want a pair of popular Air Jordans, my first option is, if I don’t have a “connection” to get a pair of these “limited” release sneakers, I have to “camp out” (for about 8-12 hours). Then, if I’m lucky, I purchase a pair, I walk outside to leave but, I risk getting robbed for that which I just camped out – or, in the extreme, possibly get stabbed or shot for them.

My second option is to pay a person who has already purchased multiple pairs of them (a “reseller” – which is why I didn’t get them in the first place). Pay double or triple the price ($400 – $600) for a pair of so-called “quality” basketball shoes that have not been improved from the days when they originally released (the 80’s or 90’s). And, having little production costs and lesser quality materials could possibly heighten the risk of blowing out my ankle because it came apart on a hard cut to the basket.

So, how does that high price point, negative buying experience and lesser product quality make me feel about Jordan Brand?

Negativity is not what Michael Jordan or his Brand originally represented. It was about hard work, developing your talent and becoming the best you can be through an athlete’s persona who, indeed, became just that – the best he could be. He became, arguably, the greatest ever to play the game of basketball. That’s where the core of Jordan Brand is positioned. I realize that.

Yet, today, the negative experiences, high price points and poor product perceptions are beginning to be associated with his Brand despite the positive things his Brand supports outside of the business.

The question is, “Will Jordan Brand do anything about it?”

My answer is a resounding,“No.” Not until their customers stop buying the products en masse and no one seems to have the balls to do that. Their market is the younger kids that want to fit in and be cool. They don’t yet have their own identity to not wear what “everyone else” is wearing and be themselves. So, the sales keep stacking up and no one really makes a dent in sales volume. And, Jordan Brand continues to get away with poor quality products because the kids just want the Jordan logo on their feet.

Only when profits drop, will Jordan Brand even begin to listen.

You’re losing loyal customers Jordan Brand – the core of your market audience. And, it’s starting to tarnish the edges of your once stellar brand.

One of those customers is me – and I’m not the only one…

On one of Jordan Brand’s signature shoes, the Air Jordan 12, the motto on the back of the heel reads: “Quality inspired by the greatest player ever.”

Really, Jordan Brand?  These days – it really isn’t.

The Air Jordan 12 “Taxi” colorway.

 

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