Stages in the Marketing Research Process: Nike - Assignment Example

2000 words MLA style 8 sources Introduction The athletic footwear is slowly becoming an oligopoly. There are a few players but the entry barriers arehigh and the interfirm rivalry is very brutal. Nike, the world's largest manufacturer of athletic footwear has recently warned that it will miss its earnings forecast this year and next. Of the reasons cited by Nike, industry experts feel that the major reason being the larger problem: static demand for products the company has to offer. In this kind of a challenging environment what are issues faced by Nike Inc, to continue as the market leader. The opportunities and threat faced by the company and the scope of market research is being discusses in this case analysis. Nike's big swoosh From the day Nike had its ad campaign with top athletes like John McEnroe, the ads created for Nike have been icons in setting standards for creativity. The Nike should not switch its focus from celebrities to its product. The campaigns were very effective with their image transfer approach, they casually transmits the message that how fashionable and trendy a person can become by buying a pair of Nike. Nike became a self-fulfilling image statement: if you want to be hip, wear Nike; if you are hip, you are probably wearing Nike (1). By focusing on the aura and image conveyed by the celebrity, Nike was able to attract those who wanted the image. Also the advertisements from Nike are very intensely inward focused concepts. It does not focus on the product, but has its entire focus on the person who wears it. The success of Nike in the market can be attributed mainly to its understanding of the consumer psyche. During the fitness crazy 1980s, Nike's campaign was totally tuned to the expectations of the consumers. This kind of understanding of the consumer results from market research. The research Nike should be doing now is a lifestyle study of its consumer to check whether a change approach adopted for advertising. The study that has to be done by Nike is of Descriptive in nature. For the research, the design will be as follows: 1. Interest/ theory - to find out various factors that affect the lifestyle of consumers which has an impact on the purchase of Nike 2. Conceptualization - lifestyle study involves identifying the kinds of products/ services consumed and a relationship with the demographic and psychographic factors. 3. Choice of research method - the research methods that can be used are market survey and unobtrusive methods like content analysis carried out longitudinal and cross-sectional across the target markets. 4. Population and sampling - the population for the study will be all the target markets for Nike across the world and the sample of the study can be selected randomly after segmenting the market into target groups 5. Operationalisation - the survey can be carried out online to elicit responses from various target markets globally. The content analysis can be carried out through observation and comparison of the people who buy Nike and their patterns of purchase 6. Date processing and analysis - after the data is collected a comparison and correlation study of the various factors and the lifestyle of consumers and their perception on Nike can be analyzed. Buyer behavior The Customer Focus(R) 2004: Sporting Goods study(2)by Vertis reveals that price and selection motivate consumer purchases more so than quality in case of athletic footwear. The results of the study show that consumers want choices and variety at a good price. A key tool in influencing buying behavior is advertising inserts and Customer Focus can provide guidance on the best way to use media synergistically. According to the survey, female shoppers with young children (ages 6-11) also see quality as less important than price in terms of being a key factor on why they shop at athletic footwear specialty stores. Price, selections are the key factors which play a more important role in deciding the brand and model for purchase. It is evident from the survey that, the consumers of the athletic footwear rely more on advertisements in various media for deciding on the purchase. And more number of consumers in this market prefer to buy their products from special sports shops and not from supermarkets. Also various studies indicate that the teens who buy athletic footwear are very loyal to their brands. The profile of the consumers show that the people who read more magazines are aggressive consumers of athletic footwear and other sports products. In yet another study by Mark Harris(3), the consumers who buy athletic footwear are mostly between the age group of 16 - 27, they do their research prior to making large purchases because they want to make informed decisions and are particular about what they buy. It is shown from studies that consumers trust advertising in magazines the most - more than television, radio, or the Internet - the consumers are diverse, vibrant, growing, and crucial market in the world today. With their considerable trustworthiness, reach, and effectiveness, magazines remain a powerful way to connect to this valuable market. In particular, the position of buyers in this industry is very powerful, because the switching costs are very less and availability of information about the costs. Market leader of all times Reports from experts Alatas, Vivi and Cameron (6) say that, in the athletic shoe industry, corporations are mutually dependent. A competitive move by one firm directly effects competitors, forcing retaliation or counterfeits. For example, Reebok's expansion of the women's walking shoe, inspired other firms to follow. The number of competitors is stable, partially due to high entry barriers. Manufacturers watch each other carefully and make appropriate countermoves to match a competitors move. The rate of industry growth is stable, but the quest for global market share is eminent. The rivalry among existing firms is high where weak firms are easily acquired by fierce competitors. The strategic issues faced by Nike are, 1. the merger and acquisitions by its competitors 2. the growing power of china as an emerging market 3. image of its brands in Europe and USA. (11) Also recent articles in Financial Times(7) and Los Angeles times(8) have indicated that Nike has become too cool, i.e., everybody has Nike. The markets have become mature in US and is quickly maturing in other markets. The current customer wants something which is more specific to their personality. Hence, the current management decision problems would be how to keep up the same image of the product and improve the sales across the world. Market research problems The core issue which Nike has to concentrate now is how to identify the factors which cause the stagnation in its brand image and how to make the brand mover ahead. Hence, Nike should take the following steps which will be like a marketing audit for the company. First identify what is the current position and the strengths of the company. Next, what does it want to achieve, here in the case of Nike, staying as a market leader. Then, what are the threats in holding the position should be determined and then how to overcome the threats should be determined. The market research problem for Nike at present is to develop a strategy to focus on its brand image globally. The following are the strengths of Nike: Nike is a very competitive organization. Nike has a healthy dislike of is competitors. Nike has no factories. It does not tie up cash in buildings and manufacturing workers. This makes a very lean organization. Nike is strong at research and development, as is evidenced by its evolving and innovative product range. They then manufacture wherever they can produce high quality product at the lowest possible price. Nike is a global brand. It is the number one sports brand in the World. Its famous 'Swoosh' is instantly recognizable. The market research objective would be to find ways to build on these strengths so that the threat from substitutes and cheaper brands are eliminated. To define this market research problem exactly, it will be like this, 1. to consolidate the strengths of Nike 2. to find and formulate cost reduction strategies for the price conscious markets 3. to analyze the strategies of competitors. 4. to devise a strategy to sustain as global market leadership To have a more clear picture about the market research problem we can further create market research questions. The following are the two primary questions that can be formulated: If product design is my strength, how can I develop models in future that are suitable to the customers The secondary questions that have to researched along with the question mentioned above are: 1. What are the expectations of my consumers with regard to product design 2. What is the expectation of the consumers from various countries and cultures about the product design The hypothesis for these questions will be, 1. The models which are in the development stage are preferred by the consumers across the world. 2. Consumers across the world do not have any difference in their tastes and preferences. The second primary question for research can be: What are the ways to achieve global market leadership The secondary questions related to this would be 1. What are the markets am I focusing on What will be the future opportunities 2. How to develop the market opportunities across the world by devising marketing strategies Hypotheses for this second research question is as follows: 1. There are more opportunities in Asian markets 2. The marketing strategies now adopted are competent to sustain as the market leader globally. When Nike plans to become the market leader and to tap the global markets internet is a major source for gathering information and to spread information about products and developments. Hence, Nike can devise market research strategies to collect information for its research in the information superhighway. There are various consumer databases available in the respective countries which can very useful for collecting information. Also it can have online surveys to the consumers to provide information about the satisfaction and perception. Also Nike can have an online panel studies the panelists from various countries. Another strategy would be to collect information from search engines and websites about the consumers' lifestyle. For marketing the products through the internet, marketing strategy should support the objective. The strategy defines the general approaches Nike will take to meet its objective. For example, strategies to support the objective could include 1) improve online communication, information, and education, 2) build awareness and interest in your company on the Internet, and 3) communicate the about the products and designs and online support facilities. For the success of marketing Nike will need a marketing tactic which is where the action takes place. Also called marketing programs or action plans, they are the things Nike has to do to bring each marketing strategy to life. Tactics for the above said strategies include improved online communication, information, and education, sharing experience and observations in your industry through participation in discussion boards, offering an email newsletter, and listing/submitting the site to targeted search engines and directories. Conclusion Achieving the status of market leader is not a very difficult task, but sustaining as a leader is the real challenge. For Nike, in the future its focus is on attaining 50% of the athletic footwear market by 2008 in US and to become the market leader in China by 2010. For achieving these objectives, it is very important for Nike to focus on market research. The market research should especially be focused on building on the strengths of Nike and how to adapt itself to the nature of various markets across the world. Sources: 1. Soloman Joile, When Nike goes cold, Newsweek, March 30, 1998 2. BNET Research Centre, Price and Selection Are Key Motivators for Where Consumers Purchase Athletic Footwear; June 1, 2004 Available at http://findarticles.com/p/articles/mi_m0EIN/is_2004_June_1 3. Porter Jeff, Harris Mark, Yeung Gavin, Nike, Management 296 - International Business Management, December 11, 2002 4. Kimerling Leslie and Sood Sanjay, "Nike: Building a Global Brand." Reprinted as Appendix E, in Keller, Kevin L., Strategic Brand Management (1998). Prentice-Hall Inc. 5. Jeannet, Jean-Pierre, Managing with a Global Mindset, pg. 44, Pearson Education Limited (2000). 6. Alatas, Vivi and Cameron, Lisa A. , "Should Nike and Reebok Pay Higher Wages The Impact of Minimum Wages on Employment in a Low Income Country" (January 8, 2004). Available at SSRN: http://ssrn.com/abstract=501713 7. Authers, John. "Bathed in Reserves of Optimism." Financial Times. March 21, 1998. 8. Kapner, Suzanne. "Market Savvy with Sneaker Glut at Stores Easing, Nike is Slowly Getting Back on its Feet." Los Angeles Times, July 4, 1998. 9. Athletic footwear market scope, sportstyle, 17th may, 1999 10. Kyle Bobette, Website marketing plan network, Internet Marketing Strategy: Developing a Website Marketing Plan, 2007 Available at www.websitemarketingplan.com/marketing_management/MarketingPlanningArticle.htm 11. Infomat, Fashion industry search engine, Footwear industry in USA, 2006 available at http://www.infomat.com/research/infre0000246.html 12. Montgomery E, Strong global footwear opportunities, apparel potential still Uncertain, Crocs Inc, Colarado, September 2007 13. Babbie Earl, The practice of social research, 3rd edition, Belmont, California, 1983 Read More