Jordan Brand: an America's Hottest Brands Case Study

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Jordan Brand
Tony Pettinato
To hear Jordan Brand President Keith Houlemard tell it, the Nike unit he runs is just like a small family business. After all, it's contained in one building amid Nike's sprawling, Beaverton, Ore., campus, and the guy whose name is on the door is still around the place all the time.

"It definitely has a family feel," he said.

Well, for a mom-and-pop operation, Jordan has amassed a pretty imposing scale. Since making the decision to drop Nike's trademark Swoosh from its sneakers during the 1990s, the brand has gone on to dominate the high end of the basketball market, with a scale in the U.S. footwear market eclipsed only by its parent.

Jordan is now bigger than Nike's merged rivals, Adidas and Reebok, combined, despite a selective distribution strategy that deliberately makes the shoes hard to find.

"Jordan has established itself as the premiere designer brand in athletic footwear," said veteran footwear analyst Matt Powell, who estimates that the brand is available in only about 10% of locations that carry Nikes. "This is the top-end, conspicuous-consumption brand."

Of course, most brands described that way are seeing sales declines now –like the U.S. footwear market in general—but Jordan has defied that gravity with double-digit gains this year.

How has the brand achieved that? Mr. Powell credits a pricing strategy that's kept the shoes even with other teen status symbols such as iPods.

Also vital is Nike's typically inspired marketing machine, which has, through the "Become Legendary" campaign, managed to simultaneously bask in Mr. Jordan's stardom while centering its efforts on contemporary stars like Carmelo Anthony, Chris Paul and Dwyane Wade, who recently dumped Nike sibling Converse to enlist with Jordan. The basketball-centric brand has also aligned with elite athletes in other sports, such as Derek Jeter and Roy Jones Jr., which Mr. Houlemard said added a sense of prestige, as well as a sense of independence from the larger Nike brand.

Many of Jordan's top efforts have come online, like a buzz-heavy microsite for a fictitious motivational speaker named Leroy Smith, who took the high-school team roster spot that famously eluded Mr. Jordan, motivating him to become a superstar. That effort coincided with the buildup to Mr. Jordan's induction into the Pro Basketball Hall of Fame this summer.

Other efforts riff off Mr. Jordan's wealth and lifestyle: A photo of "Team Jordan" on the brand's website eschews customary action shots for a group picture of the endorser roster in business attire, with Mr. Jordan posing, chairman-like, at the picture's center.

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