Nike Inc. designs, develops, and markets footwear, apparel, equipment, and accessory products. Nike is the largest selle

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Nike Inc. designs, develops, and markets footwear, apparel,
equipment, and accessory products. Nike is the largest seller of
athletic footwear, athletic apparel, and other athletic gear in the
world, with 30% market share worldwide. As of 2006, the sells its
products through a mix of independent distributors, licensees, and
subsidiaries in approximately 120 countries worldwide. Nike has
grown from an $8000 company in 1963 to a company with revenues of
$13.74 billion for the year ended May 31, 2005. In 2004, Nike spent
an enormous amount of money, more than one billion dollars, on
advertising, endorsements, and sales promotion. In order to make
sure that the money is being spent properly, Nike relies on
marketing research. It has shown a history of innovation and
inspiration in its marketing and is quick to adapt to the changing
consumer needs and the world of sports. Nike has used marketing
research in understanding where the future growth lies. A recent
example is Nike’s shift from marketing in the more traditional
sports (basketball and running) to other sports (golf and soccer)
where it has not been strong traditionally. Marketing research
revealed that the awareness of Nike among soccer and golf players
was low and it has decided to work on increasing these numbers.
Nike has decided that the money needed for licenses in its strong
areas can be better spent in other areas where Nike does not have
the brand awareness. Today the Nike Swoosh is recognized around the
world. This is the result of more than 40 years of work and
innovation. It signed the first athletes to wear its shoes in 1973.
Early on, Nike realized the importance of associating athletes with
its products. The partnership helps relate the excellence of the
athlete with the perception of the brand. Through marketing
research, Nike discovered the pyramid influence, which shows that
the mass market can be influenced by the preference of a small
group of top athletes. After it realized this effect, Nike began to
spend millions on celebrity endorsements. The association with the
athlete also helps dimensionalize who the company is and what it
believes in. With Nike this was and is extremely important. It
wants to convey a message that the company’s goal is to bring
innovation to every athlete in the world. Nike also uses the
athletes to design new products by attempting to meet their
individual goals. The company also realized that in order to
achieve its lofty growth goals, it must appeal to multiple market
segments. Based on marketing research, Nike divided the market into
three different groups. There is the ultimate athlete, the
athletics participants, and the consumer that is influenced by the
sports culture. Nike has always been an aggressive user of business
research and this has been shown in its attack on the European
market. It decided to concentrate on different sports in order to
reach European consumers. Americans love baseball, football and
basketball, but Europe’s favourite game is soccer. Nike placed its
focus on major sporting events (World Cups and Olympics) and
celebrity athletes that are relevant to the European consumers.
Business research in the form of focus groups and survey research
revealed that the best positioning for Nike shoes was one that
enhanced performance in sport. Through massive advertising
campaigns it has been able to change the perception of its products
from fashion to performance and in the process increase sales
dramatically. Another technique it has used is to specifically
design a product line for a certain market. Nike uses business
research to determine the lifestyles and product usage
characteristics of a particular market segment and then design
products for that segment. An example is the Presto line, which was
designed for a certain lifestyle of youths. It puts this lifestyle
first and designed the products around this group, hoping to reach
them. It also used research to determine the most effective media
to communicate with the target market. All of these methods have
allowed Nike to become recognizable by 97% of US citizens and its
sales have soared in the process. However, it faces a new concern.
This concern is that it has lost its traditional image of a
smaller, innovative company. It also faces future obstacles in
maintaining brand equity and brand meaning. Continued reliance on
business research will help Nike to meet these challenges,
associate its brad with top athletes and performance, and enhance
its image.
A. Nike would like to increase its share of the athletic shoe
market. Define the management decision problem.
B. Define the appropriate research problems corresponding to the
management decision problem you have identified.
C. How can qualitative research (exploratory design) be used to
study the image of Nike? Which qualitative research technique/s
should be used and why? Give the salient features of the proposed
technique.
D. Should Nike invest by opening more upscale company retail
stores such as Nike Town? Management is wondering if survey
research (descriptive design) can provide an answer. If Yes, How
should such a survey be administered?
E. Develop a questionnaire for measuring the image of Nike.
(make only psychographic questions with mention of complete
scale)
F. Develop a sampling plan for administering the survey as
proposed in “D”. Also propose the sample size, after taking valid
assumptions. Give the salient features of the proposed sampling
design.