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Nike, Inc.

Nike Netlytic Analysis MKT 425 RA Project

Company: Nike, Inc. is an American multinational corporation founded in 1964. It is a growth company that creates and innovates must-have athletic products, especially apparel and footwear. Nike’s mission is to provide athletes with products that both inspire and promote high performance. Nike is an extremely well-renowned brand known to sponsor high-profile athletes and sports teams, making it the largest seller of athletic apparel and footwear in the world. Since 2012, Nike’s revenue performance has increased at a steady rate, proving themselves to be a top player in the retail industry. As of March 2017, revenues are up 5 percent to $8.4 billion (Nike). The pattern of Nike’s revenue indicates they are a company that will continue to generate high performing sales as they proceed to develop new products. Nike’s Transition: Within the past decade, Nike has transitioned from just a sports footwear and clothing brand to an athletic lifestyle company. The brand has interjected itself into political and social issues and takes a clear stance on many issues (Stack). Perhaps most buzzworthy is the company’s decision to put ex-NFL player Colin Kaepernick at the center of its latest “Just Do It” campaign where he protests the country’s treatment of black people by kneeling during the national anthem. A recent survey by Morning Consult, a market research firm, found that urban and young consumers were more likely to say they would react favorably to a company that advocated the right of protesters to kneel during the national anthem. This is noteworthy because “nearly two-thirds of individuals who wear Nike in the United States are under 35 years old,” as reported by The New York Times (Draper). During our group’s own analysis of Nike’s social media, we discovered that the tactic sometimes backfire, as some consumers criticize Nike for capitalizing on edgy politics in an inauthentic manner. Overall, Nike is still a highly reputable and coveted footwear and clothing brand that has also invested as branding itself as a athletic lifestyle company. Facebook’s Word Cloud Analysis: Facebook is a social network that fosters connections with friends and brands and plays an integral part in developing a customer relationship with a company. When analyzing the text and social media chatter from Facebook, we discovered that for the most part, consumers had positive engagement with the brand. Satisfied customers and fans will post positive feedback about products on their own news feeds while tagging Nike. The word that was most prevalent behind “nike” was “shoes” which illustrates that consumers have a strong brand association with this product. This is important to note because many other prevalent words had to do with social and political issues the brand is involved with. The Facebook word cloud showed that some customers felt betrayed by Nike’s decision to partner with controversial athletes like Tiger Woods and Colin Kaepernick. The word “Kaepernick” appeared 46 times, “Colin” appeared 51 times, and “Pacquiao” appeared 30 times. To give context, Nike recently cut ties with Manny Pacquiao, an international boxing star, after derogatory comments he made about the LGBTQ community. This word cloud shows that consumers are primarily concerned with the brand’s product as evident by the most common words “shoes,” “products” and “running.” However, Nike must be weary of consumers using Facebook to complain about the brand’s political stances. The

Facebook word cloud highlights the risks that Nike faces while partnering with controversial athletes such as Tiger Woods and Colin Kaepernick. Facebook’s Categorical Analysis: The Facebook categorical analysis allows us to infer that a lot of Nike followers are using this social network to provide feedback on the brand’s ads rather than the brand’s products. Most positive sentiment had to do with Nike’s products, and people’s negative sentiment had to do with the brand’s advertisements regarding social and political stances. During our word cloud analysis we found that “shoes” was the most prevalent word. However, since “shoes” does not paint a positive or negative picture on its own, we decided to conduct deeper research. The good feelings category was the largest category by a substantial amount. Consumers who had positive feelings about Nike shared feedback using words like “comfortable,” “shape,” and “nice.” This leads us to believe that Nike is supplying people with functional products leaving consumers satisfied. We looked further into some of the words like “funny” and “silly” in order to gauge the customer’s true feelings of the brand while looking out for sarcasm and double negatives. In one specific instance where Nike posted an ad about Tiger Woods’ return, many of the comments did show sarcasm. One consumer wrote, “This ad is hilarious. Nike’s newest decision to go political means I will no longer buy or promote Nike!” It was very apparent that consumers had polarizing opinions regarding Nike’s political and social stances. The bad feelings category showed strong words like “ashamed,” and “upset.” However, this category was outweighed by the positive feelings category which primarily had to do with Nike’s shoes and clothing products. Twitter Word Cloud Analysis Twitter is the social media in which people can easily engage and conversate with pretty much anyone, even celebrities, politicians, etc. By extension, it is the social media outlet in which most people use to talk about what is happening in the world. Twitter’s trending page allows for users to see what and how many people are talking about certain topics while also showing a curated feed of news specific to the users’ interests. For brands, Twitter can be a great way to engage with customers or pull cool branding stunts, but alternatively it can also be an outlet in which consumers publicly shame, demean or criticize it. In our social listening of Nike’s Twitter, it was surprising to see someone’s name as one of the most common words used with “Nike”. After some digging we learned Nike is currently involved in a huge scandal with celebrity lawyer Michael Avenatti. Allegations of extortion, bribery, and released confidential information is making for a Nike PR nightmare and people are taking to Twitter to talk about it. Other words that made the cut were “scandal”, “lawyer”, and “criminal”, all of which certainly have to do with this event. Overall, Twitter was the social media of choice for people to talk about this as they could directly @ Avenatti and Nike while also sharing their thoughts on the matter with all of their followers. Thus, we concluded that when a scandal erupts for a brand, people will most likely come to Twitter to talk about it.

Additionally, we noticed that the cloud featured a lot of different cities and country flag emojis. In investigating into it a little further, we concluded that Nike’s Twitter is the platform that is the most global. When sharing news about events in foreign places, Nike almost exclusively uses Twitter and receives engagement from followers of all different cultures. When it comes to Nike both giving and receiving engagement to and from foreign places, Twitter is where it happens. Twitter Categorical Analysis Despite the ongoing scandal Nike is currently facing, the comments regarding the brand were still mostly positive. At the end of the day, Nike is one of the most beloved brands and it will take much more than one scandal to actually change general opinion of it. Perhaps people were talking about the incident in a more neutral way, just recording what is happening and engaging in civil discussion about it online. Another hypothesis would be that people could just be @ing Avenatti when they wanted to say negative things. Despite that, people also take to Twitter when they want to share a good experience or want to publicly praise a brand. The majority of posts were positive with words like “happy”, “kind”, and “good” being used. For the few negative comments, unique words like “creepy”, “selfish”, and “evil” were being used which, for the most part, turns out were being used to describe Avenatti and not Nike. YouTube World Cloud Analysis YouTube, being a platform tailored predominantly for videos, offers content that is up for the most interpretation. Videos are not always straightforward and, in different contexts or moods, can be viewed in totally different ways. For Nike, a brand that has historically put out controversial, socially/politically influenced content, this means that polarized reactions are more likely to occur. It was no different with one of Nike’s newest ads called “Dream Crazier”, an ad that calls out the double standards female athletes face. As seen in the word cloud, there are quite an array of words that came up, some pretty good while others aggressively bad. Many different forms of profanities, “propaganda”, “stupid”, and “boycott” all make appearances meaning that, as with almost all socially driven advertisements, there will be a fiery backlash that argues that it’s not Nike’s place to input its opinion. On the other hand, some took very well to the ad with words like “equality”, “great”, and “love” being used frequently. Because there is so much to be digested with such a powerful, controversial video ad, it makes sense that YouTube would harbor a very polarized discussion in the comments section. YouTube Categorical Analysis Similarly, the categorical analysis shows similar polarized results with over 280 positive comments and over 160 negative comments (by far the most negative of any platform). Based on the nature of the ad, people were using more powerful words than the typical “good” or “great”. People were moved by the ad because they used more potent words like “brave”, “proud”, and “fantastic”. This makes sense as for people who agree with the message of the ad would be more than just “good” or “happy”, they would be provoked to write a more passionate response. Conversely, people who didn’t agree with the message of the ad had a stronger response as well, using more intense words like “evil”, “dangerous”, and “terrible”. Overall, in Nike’s case, because they sometimes use provocative subjects in their advertisements and because the nature

of the video format allows for more content to be scrutinized, strong reactions and uncivil debate are more likely to ensue. Overall Summary of Differences Facebook seems to be used as a feedback outlet for Nike’s consumers. As was mentioned, a lot of the positive chatter revolved around reviews of its products. Because Facebook is designed to link users with their friends and family, people like to use the social media platform to tell their loved ones of a good product. This is a good sign for Nike as WOM from close friends or family will be more influential in getting others to buy their products rather than their ads. This kind of WOM marketing wouldn’t work as well on Twitter or YouTube as people on those platforms would more likely have random people following them or engaging with them. For Twitter, the platform was used as a way for people to comment on current issues/events Nike is involved in. Nike is currently fighting a scandal and Twitter was the primary outlet people used to talk about that issue. This social media makes sense for this type of engagement because it easily allows you to have conversations with other people to discuss different opinions and perspectives on the subject matter. Twitter was also the outlet in which the most global interaction took place. Because Nike is the most active on this platform, it makes sense to use it to announce cool events and promotions happening around the world. Finally, for YouTube, this platform had the most heated discussions and debates based on Nike’s video ads. YouTube, by nature, is built for videos which create the most content to interpret. Therefore, because of the nature of Nike’s ad creative directions and YouTube’s video format, there is a lot to be discussed and debated. And with any online debate, things can get heated fast and quickly turn into two polarized sides. Overall, we noticed more intense, polarizing interactions on Nike’s YouTube channel. S.W.O.T. Analysis Nike Inc. is a global leader in the athletic footwear, equipment and apparel market, successfully competing against other giants like Adidas. A SWOT analysis of the company outlines how its strengths relate with its weaknesses (internal strategic factors) and how opportunities relate to threats (external strategic factors). This analysis will be conducted on the basis of the factors emerged during the examination of the various social platforms where the company operates and interacts with its customers, so that it will be possible to see how these interactions affect the firm’s business. Strengths • Strong brand image: There is no doubt that Nike is one of the leading suppliers of footwear for athletes all over the world. It controls around 45% of the market share in the U.S and it was listed as one of the top 30 most valuable brands in 2016. This dominant market position and significant brand equity around the world is due to their portfolio of strong brands (Nike, Converse, Jordan and Hurley), each specialized in different aspects of the athletic world, as well as to the firm’s status among celebrities and sports professionals- its ongoing sponsorship of sport events has built brand recognition for quality, performance, reliability and innovative style, contributing to increase the company’s strength and image. This is one of the reasons why we have been able to rely

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on a significant amount of data in the forms of comments and reactions to Nike’s marketing activities: the firm is the most famous sports brand in the world, everybody knows the famous “Swoosh” and the company is one of the most referred to and followed on social medias. Number one shoemaker: Nike designs and sells shoes for many different sports such as baseball, volleyball, tennis, golf, cheerleading and football. It operates shoe and sportswear stores both in towns and as factory outlets throughout US and other 180 countries. As a matter of fact, the second most prevalent word in the Facebook Cloud Word Analysis was “shoes”, showing how strongly consumers associate the brand with this product. The number and significance of positive comments related to the latter also proves that the company is generally capable of satisfying customers with the high quality of its products. Global brand: the company is known worldwide and is able to support global market dominance. As emerged from Twitter’s analysis, Nike’s events all over the world are attended and followed by millions of people from many different cultures. The wellknown tag line of “Just do it” is able to inspire consumers from almost everywhere. Multi-channel approach: Nike’s extensive global production and distribution network enables it to support global market leadership. The company uses multiple channels to distribute its merchandise: they own many retail stores all over the world and they also sell their products online and through a mix of independent distributors and licensees in a way that they have substantially increased their total customer base. Nike has heavily invested in the creation of effective social medias where it constantly posts news about products and collaborations.

Weaknesses • Problems with strategic partners: controversial partnerships like the above-mentioned with Colin Kaepernick and scandals Nike has been involved in have brought attention to the company’s overall lack of transparency. These circumstances have certainly endangered the firm’s brand image and have been at the center of multiple discussions on social medias, as emerged by the Facebook and Twitter Cloud Word Analysis. • Limited product mix: even though Nike has expanded its product mix through the years, the income of the business is still heavily dependent on its share of the footwear, sport equipment and apparel market, as emerged from our word cloud analysis where consumers showed to be primarily concerned with Nike’s sport shoes. This can be particularly risky considering that market trends change and companies that do not sustain themselves through a product diversification strategy may be left vulnerable if for any reason their market share erodes. • Labor controversies: Nike has been plagued by accusations of poor working conditions in what have been described as low-wages, sweatshops and child-workers manufacturing facilities. This has of course plagued the company’s brand image and has been at the center of multiple discussions on social medias, especially on Twitter, as we have been able to analyze. Any continued use of these unethical or questionable practices could further harm the company’s brand image and lead it to lose environmentally and socially conscious consumers. • High price and price-sensitivity of consumers: Nike is positioning itself more and more as a premium brand that has become out of reach for many price sensitive consumers to

the point where some people have even been shot and robbed of their Nike shoes. This creates a company dilemma and could cause alienation and eventual migration of current target market towards more price-conscious brands. Opportunities • Global development : considering that there has been a tremendous growth in the market for footwear and that the forecasts for the future are even more positive, Nike is in a good position and could exploit its strong brand portfolio to take advantage of the growing need for footwear. In particular, this business could be developed internationally by leveraging the company’s global brand recognition: international marketing events such as the World Cup and The Olympics are the perfect way to reach this goal. Furthermore, a good opportunity for Nike are the emerging markets like India and China, where consumers are getting more disposable income and interest is growing in western brands. Nike could exploit this situation by increasing sponsorships of local sport stars and celebrities. • Development of a broader product mix: Nike should try to diversify its product portfolio by either creating custom footwear for the luxury segment or focusing on customer segments that are looking for more affordable pricing. Otherwise, Nike could try to diversify by partnering with sporting good equipment makers so to create brand extensions. • Growing online retail channel: as emerged from our cloud word analysis, Nike’s customers show a growing preference for shopping online. By working on Nike’s online stores, the company could turn this dynamic into its favor and increase its revenues. Threats • Intense competition: Nike operates in one of the most competitive businesses in the world. Strong competitors such as Adidas, Puma etc.. are developing alternative brands and strategies to take away Nike’s market share so Nike must find a way to deal with this threat if it wants to maintain its leadership position in the market. • Imitation/Counterfeit products: Internet has aided the spread of counterfeit product all over the world and this creates an obvious threats not only to Nike but to any other brand’s revenues, especially in developing countries where there are poor patent legal protections. • Problems related to internationalization of trade; as Nike buys and sells in different currencies, costs and margins are not stable over time. This and other problems related to international trade - such as labour strikes, currency fluctuations and other trade practices- threaten Nike as well as any other global brand. Recommendations 1. TWITTER a. What: We will increase customer engagement globally by promoting countryspecific products/campaigns on Twitter twice a year. For example, on January 1st, Nike’s Twitter will exclusively announce French-themed designs for popular products. These products will then only be purchasable until January 31st from retail stores in France. Customers will find out about the launch and related news only via Twitter for the first two weeks, after which other social platforms and

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