Helping Nike Management - Essay Example

Q1, Should Nike switch from a focus on celebrities to a focus on its products in its advertising Discuss the role of marketing research in helping NIKE management make this decision. What kind of research should be undertaken General human tendency is inclined towards sprinting on a positive gut feeling or intuition. Instinctively, my answer to this question would be to switch to more focus on products. The reason for this is very simple. In the early nineties, Don Carlos, a brand of shoes, started a very effective advertising campaign, which is still registered in the minds of many consumers. It was a black and white television ad with a jingle without music in a heavy feminine gipsy like voice. The visuals comprised of no celebrity association, just the shoes of a person walking. The advertisement had immense recall since the brand was highlighted and there was no celebrity endorsement to overshadow the brand. However, this approach might not be quite as successful in every era. The best way to make this difficult decision would be by making a decision backed by consumer support in form of conducting "Quantitative Market" and "Qualitative Market" research. For this particular purpose, the research methods that can be utilized are as follows:- 1. Ad Tracking: As defined by Young, is a periodic or continuous in-market research to monitor a brand's performance using measures such as brand awareness, brand preference, and product usage." (Young, 2005)( http://en.wikipedia.org/wiki/Marketing_research) 2. Commercial Eye Tracking examine advertisements, package designs, websites, etc by analyzing visual behavior of the consumer (http://en.wikipedia.org/wiki/Marketing_research) 3. Concept Testing: The aim of this is to test the acceptance and the reaction of target audience & potential customers to a campaign or campaign idea. 4. Cool Hunting :- to make observations and predictions in changes of new or existing cultural trends in areas such as fashion, music, films, television, youth culture and lifestyle (http://en.wikipedia.org/wiki/Marketing_research).Nike is a brand for the youth. The advertising campaign should be such that it should focus on the youth , their interests and then the advertising campaign should focus on those interests for example, NIKE can be marketed to all sporty , college going youth. 5. Buyer decision processes research - to determine what motivates people to buy and what decision-making process they use (http://en.wikipedia.org/wiki/Marketing_research).For this purpose, an extensive survey can be undertaken in which the customers in the Nike outlets in different regions are asked to fill up a questionnaire with a set of questions. The analysis of this a survey, can help determine a lot many factors that influence buyer behavior. 6. Focus Group: Having a group of customers sit in a panel with the marketing team of the Nike group in order to discuss what the customers are looking for in a athletic shoe brand and what would influence their decision to purchase the most. How would you describe the buying behavior of consumers with respect to athletic foot wear (courtesy:http://www.tutor2u.net/business/marketing/buying_decision_process.asp) Above is a diagram that shows the model that the customer follows in making a purchase decision. Shoes are a basic need and thus the buying behavior would be low involvement. However, Nike, the athletic shoes brand, not only satisfies a need but also gives psychological benefits to the consumer. The consumer starts associating himself with the attributes of the Nike brand. The attributes of NIKE can be described as Trendy, Comfortable and Athletic and representing a lifestyle for the young. Thus, for these psychological benefits the customer is willing to pay a higher price for Nike shoes as compared to any other shoes. The second step would be to search out information. For this purpose, the customer would be vulnerable to the information bombardment through various sources including peer pressure, Print advertising, on campus advertising(in schools, colleges), advertising through electronic media(television, Radio, Internet), Advertising on the outlets in form of on site promotion through brochures and pamphlets and through their past experiences of using the product. In this context, the role of influencers can not be ignored. The major influencers influencing the decision to buy Nike would be peers, sports coaches, sales personnel and retailers. The third step would be, Evaluation of alternatives. This is where brand loyalty, brand awareness, Brand personality, Price and value for money come into play. The customer would break down his choices to just three Reebok, Nike and Adidas and will choose from amongst them. He will tend to choose the brad that provides maximum value for money, including the tangible features(comfort, style, colour, price ) and the intangible features(brand personality and brand awareness).The consumer will tend to choose the brand that will give him the best mix of tangible and intangible features. The consumer will then make the purchase and this starts the post purchase evaluation of the athletic footwear brand. The consumer will want his shoes to come up to all his expectations. His experience of the usage would be the basis for his future purchase decisions. What is the Management decision problem facing NIKE as it attempts to retain its leadership position The major problem Nike faces is Re-asserting itself as the market leader in athletic shoes brands as compared to its competitors Reebok and Adidas in the international markets. One third of Nikes market share comes from international sales and in future, it is likely to grow. Also, Nike needs to assert itself as the athletic shoes brand for games like soccer and other games. Define the marketing research problem facing Nike, given the management decision problem identified The major research problem being faced by Nike would be penetration into the different geographical markets and cultures. What appeals to customers of one culture might not appeal to customers of another culture. Likewise, the national game of one country would different from another country. The brand might be global, but the campaign has to be focused to attain the position of market leader in the new markets. Language could be another barrier. Cross cultural marketing has to portray the same attributes and same message in different languages. Conducting quantitative research through survey questionnaires and focus groups would be difficult due to different language and lack of the density of outlets and a research agency would have to be hired for this purpose .The major reliance would be on secondary data which might have the following disadvantages: Data may be incomplete Might not be detailed enough to aid decision making Data may not be available Data may not be directly comparable The data was collected for some other purpose Problems over reliability of data, and different definitions and interpretations of data. However, a solution to these problems can be in form of hiring a marketing research company like for example Ac Nielsen for this purpose but that would be exhaustive on resources. Develop two suitable research questions and formulate two hypotheses for each. 1. What brand of athletic shoes will be your first choice Hypotheses 1: Nike is the market leader Hypotheses 2: Reebok is the market leader in international markets 2. Which athletic shoe brand provides maximum value for money Hypotheses 1: Nike provides value for money Hypotheses 2: Other brands provide better quality products as compared to Nike. Three Sources of Secondary Data Research (source http://www.tutor2u.net/business/marketing/research_conducting.asp) Secondary Sources: Using secondary sources in marketing research implies the use of data that already exists. Secondary data is basically data which was collected for some other purpose. There are two sources of secondary data: 1 Internal Sources: refers to data available with in the company 2 External Sources: refers to data collected from outside the organization INTERNAL SOURCES EXTERNAL SOURCES Company Accounts Internal reports and analysis Stock records Retail data, loyalty cards Customer complaints Customer records Government Statistics EU statistics Trade Publications Commercial Data Magazine Surveys Industry associations -courtesy tutor2u.net The three marketing research sources I advise for NIKE to use are:- 1. Retail Data 2. Government Publications(Social Trends, Regional Trends, Annual /monthly abstract of statistics, Census Data, Economic Survey) 3. Publications fro International Organizations (EUROSTAT from EU, Main Economic Indicators from OECD, The demographic Year Book from UK) 1. Retail Data:- This is data collected directly from distributors, retailers and customers through feed back forms. This data is usually collected to monitor customer satisfaction behavior and to take their suggestions and ideas for improvement. However, this data, can also, be used to identify the changing trends and tastes of the consumers. For example, A Nike outlet that just started operations in Japan and Mexico, can localize the brand by asking their customers or even walk in visitors (window-shoppers) their feedback on what sort of shoes they might appreciate, what styles, colors and comfort features they require. Other than this, the impact of the ad campaign can also be evaluated by including questions in the questionnaire pertaining to the latest promotion or campaign or through monitoring the changes in sales levels before and after a campaign. Retailers and distributors are a vital source of information and can give useful insight into what is the preference of the customers. 2.Government Publications(Social Trends, Regional Trends, Annual /monthly abstract of statistics, Census Data, Economic Survey) This is a vital source of information since Nike aims to enter into foreign markets. Every business market is not the same and every culture is different. Before entering into an unknown market like Pakistan, it would be best to get a clear demographic and economical picture of the country. For this purpose, Government publications like Economic Survey of Pakistan, population Census results etc may come in particularly handy. For example if a country has a GDP growth rate above 6 percent per annum, then there is a fair chance of pricing the shoes at the higher end. However, in countries where the real; purchasing power is low, the athletic footwear would have to be priced according to the income levels prevailing. Like wise, the population statistics can show the percentage of under 25 youngsters comprising the population. Further disintegration can show the male: female ratio in that. Inference from these two figures can roughly give a layman's figure of the market size of the athletic footwear. 3. Publications fro International Organizations (EUROSTAT from EU, Main Economic Indicators from OECD, The demographic Year Book from UK) The purpose of publications from international organizations is the same as publications from Government organizations. However, the difference lies in "Bias". Government publications tend to be biased in favor of the prevailing government. International organizations will be able to provide the same data without being inclined to bias. However, this data might not be very specific. (1776 Words) References:- Philips-Armstrong, Principleas of Marketing, International Edition, Ninth Edition Date Viewed 12th December 2007, http://en.wikipedia.org/wiki/Marketing_research) Date Viewed 12th December 2007,www.tutor2u.net Read More