Case Study: Nike Sprints Ahead of the Competition, Yet Has a Long Way to Run

Nike Sprints Ahead of the Competition, Yet Has a Long Way to Run
Summary Of The Case

Nike Inc. located in Beaverton, Oregon, is the number one U.S athletic footwear
company and one of the most recognized American brands among foreign consumers.
This high degree of recognition is one of main reasons Nike has been so successful. For
the year ended May 2001, the company continued to rise, with sales of over $9.5 billion.
Perhaps their success could be attributed to its concept base advertising campaign that is
often called “image transfer”. The ultimate goal of this type of ads is to make a
connection. Advertising campaign represent that real athletes prefer Nike and that
perhaps the general audience buys the brand they will play better, that’s why they focus
on celebrities for advertising the product.
In 1998, Nike shifted to a new phase in its marketing strategy. Nike emphasized more of
its product innovation skills than the previous year. They recognized that their ads need to
tell consumers that we’re about product innovation and not just athletes and exposure.
With launch of the “I Can” campaign, Nike showed less of the celebrity athletes that
previously adorned its marketing output and showed more product usage than in the
previous. Because of competitors Reebok and Adidas recently featured more product
feature ads and were met with a great deal of success. Despite this rearranged focus Nike
did not back away from innovative marketing. Nike was named one of 2001’s best in
advertising by Time Magazine for its ad featuring. As the company look ahead to 2010, at
the heart of Nike’s future strategy is the international arena. As of 2003, international
sales comprised one third of Nike’s business. Nike would like to expand into the soccer
and international sport arena, to do so it have to refocus its marketing and distribution in
order to re-establish itself as an authentic, technically superior sport shoe.
In February 2001, Nike unveiled its latest technological revolution, the Nike shox in
United Kingdom consumers. More recently, Nike bought many of its worldwide
distribution centers in order to achieve greater control of its operations. In the future,
Nike would like to build up its presence in the key markets of China, Germany, Mexico,
and Japan. Nike realizes that while it is ahead of competition, it still has a long, long way
to run.

Assignment on Marketing Research 1

Case Study: Nike Sprints Ahead of the Competition, Yet Has a Long Way to Run

Major Information

 Nike is the number one U.S athletic footwear company.

 One of the most recognized American brands among foreign consumers.
 They have high degree of recognition in the world market.
 The company continued to rise, with sales of over $9.5 billion.
 Nike practice concept base advertising campaign that is often called “image
transfer”.
 Nike ads traditionally did not specifically place a product but a Celebrity and
the ultimate goal of this type of ads is to make a connection of both athletics
and general buyers.
 In 1998, Nike shifted to a new phase in its marketing strategy that is Nike
emphasized more of its product innovation skills than the previous year and
this product innovation not just athletes and exposure.
 Nike was named one of 2001’s bet in advertising by Time Magazine for its ad
featuring.
 They are look for pretty strong recognition for future in the international
arena.
 In February 2001, Nike unveiled its latest technological revolution, the Nike
shox in United Kingdom consumers.
 Nike bought many of its worldwide distribution centers in order to achieve
greater control of its operations.
 In the future, Nike would like to build up its presence in the key markets of
China, Germany, Mexico, and Japan.
 Nike realizes that while it is ahead of competition, it still has a long, long way
to run.

Assignment on Marketing Research 2

Case Study: Nike Sprints Ahead of the Competition, Yet Has a Long Way to Run

STRENGTH AND WEAKNESS

Strength:
High degree of recognition in the world market.
Concept base advertising campaign that represent as “image transfer”.
Nike has strong product innovation skills.
Nike usage innovative marketing strategies that differentiate their consumer
focus ads from competitor and by the way gain competitive advantages.
Enough capability to re-establish their marketing and distribution as an
authentic, technically superior sport shoe manufacturer.
Technological development.
High standard quality product that provide support, comfort, and style all at
the same time.
They have worldwide distribution centers.
Nike offer larger-than-life-size displays, often featuring an athlete or
individual product details.
Impact-full product presentations revealing key styles and inspirational
stories.
Nike has complete product collections and deeper storytelling that drive
home a true connection between consumer and product.
Their sales in a year over $5.5 billion.

Weakness:
 Nike athletic footwear company mainly targeted only the athletic not all the
general consumer, that means segmentation is not in general.
 Their advertising campaign based on concept, not the product based.
 They have not enough control over the U.S inside market.

Assignment on Marketing Research 3

Case Study: Nike Sprints Ahead of the Competition, Yet Has a Long Way to Run

OPPORTUNITY AND THREATS

Opportunity:

Nike focuses on celebrities of their product by the way general consumer

influence to buy that product.
Expand the markets of China, Germany, Mexico, and Japan as a key market.
Technological revolution that can be developed their product as very popular
to athletic as well as others buyers.
Nike has complete product collections and deeper storytelling that drive home
a true connection between consumer and product.
Nike offer larger-than-life-size displays, often featuring an athlete or
individual product details.
Threats:
 Environment of the U.S. inside and others international market.
 Competitors advertising feature by which they’re met with the great deal of
success.
 Competitor’s product.
 Competitors of across the industry boundaries.
 Cultural affect and so on.

Solution of the Question

Question #1 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 Management make
this decision.

Answer:
Yes, Nike should switch from a focus only on celebrities to a focus on products in its
advertising. I think it is better for Nike to use both celebrities focus advertisements and

Assignment on Marketing Research 4

Case Study: Nike Sprints Ahead of the Competition, Yet Has a Long Way to Run

also product based advertisements. Because, it only attracts the athletics, not all
segmented consumers. If they focus their product by describing the product facility,
quality it can be increased the acceptance of Nike’s product to general consumer.
For this purpose, marketing research can help to management in decision making by
conducting a research to determine the effectiveness of the current advertising campaign
(Focus on celebrities).

Question #1 How would you describe the buying behavior of consumers with respect
to athletic footwear?

Answer:
Consumer Buying Behavior refers to the buying behavior of final consumers- individuals
and households who buy goods and services for personal consumption.
For analyzing the Consumer Buying Behavior, Marketer can study actual consumer
purchases to find out what they buy, where and how much they buy. The company that
really understands how consumer will respond to different product feature, prices, and
advertising appeals has great advantage over its competitor. The following figure shows
that marketing and others stimuli enter the consumers “black box” and produce certain
responses and for that must need to figure out what is in he buyer’s black box.

Marketing External Buyer Black box Buyer Responses

Product Economic Buyer Product choice
Price Technological Characteristic Buyer Brand name
Political Decision Dealer choice
Promotion Cultural Purchase timing
Place Purchase amount
Figure: 1.1 Model of Buyer behavior

For analyzing the Consumer Buying Behavior, it needs to understand how the stimuli are
changed into responses inside the consumer’s black box, which has two parts that are:
 The buyer characteristics influence how he or she perceive and reacts to the
stimuli.

Assignment on Marketing Research 5

Case Study: Nike Sprints Ahead of the Competition, Yet Has a Long Way to Run

 The buyer’s decision processitself affects the buyer’s behavior.

Consumer purchases are influenced strongly by cultural, social, personal and
psychological characteristic.

Cultural Social Personal Psychological

Cultural Reference Buyer age Motivation
Perception
Sub Cultural group Occupation
Learning
BSocial Class Family
Economic
Beliefs Buyer
situation
Attitudes
Roles & Lifestyle
Personality
status
Self-
concept
Figure 1.2: Factors influencing consumer behavior

In this case, buying behavior of Athletes is mainly characterized by Personal and

psychological factors. Because as an Athletes need to footwear for playing better with
comfortable. So they drive to buy the Nike footwear.

Question #3 What is the management decision problem facing Nike, given as it

attempt to retain its leadership position?

Answer:
I think, Nike face the following management decision problem to retain its leadership
position:
 Should the advertising campaign be changed?
 Should Nike expand the market in international arena and is it hold in with
strong recognition?
 Should Nike change its marketing strategy and reestablished the distribution
centers in international arena?

Here, the management decision problem asks what the Nike decision maker needs to do
and it mostly action oriented.

Assignment on Marketing Research 6

Case Study: Nike Sprints Ahead of the Competition, Yet Has a Long Way to Run

Question # 4 Define the marketing research problem facing Nike, given the
management decision problem you have identified.

Answer:
The marketing research problem can explain the above management decision problem by
the following possible way:

 To determine the effectiveness of the current (celebrities focus ads)

advertising campaign.

 To identify the extreme growth opportunity of new market and to measure the
awareness, perception about Nike and mage of Nike, so that’s Nike will
capable to holding in market for long time as with strong recognition.

 To identify who are the customer? What are their psychographic

characteristics?

Question #5 Develop two suitable research questions and formulate two hypotheses
for each?

Answer:

Research Question: When general audience (who are not athletic) buys the Nike product?
Hypothesis 1: When their favorite athletes preferred Nike
Hypothesis 2: For that they will play better too.
Research Question: how do athletes become attached to Nike footwear?
Hypothesis 1: As because, Nike footwear products consistency of quality, comfort-ability,
shock absorbency or style.
Research Question: can the footwear buyers be segmented based on psychographic
characteristic?
Hypothesis 1: There are two segment of footwear of Nike:
Hypothesis 2: Each segment is motivated to own Nike footwear for a different reason.

Assignment on Marketing Research 7

Case Study: Nike Sprints Ahead of the Competition, Yet Has a Long Way to Run

Question #5 How can the internet be used to help in conducting marketing research,
and in marketing its product?
Answer:
Nike can use the Internet to conducting a marketing research for collecting data from
customer in worldwide survey or mailing about their product performance, brand
awareness and etc. They can also use internet for collecting valuable suggestion from
loyal customer and famous athletic and general buyer.
For marketing their product they use internet as an advertising media, offer new products,
collect order from large buyer, established digital distribution center, presentation of
larger-than-life-size displays, often featuring an athlete or individual product details and
so on. Placing a priority on premium presentation at all levels of their web sites they can
able to attract the more customers. So the look and feel created for flagship stores such as
Nike towns in London, New York and Berlin drive consistency to all stores, whether the
locations are managed by Nike or not.

RECOMMENDATION

Nike is the most recognized brand of athletic footwear products with increased research,
design, taking new strategy about advertising campaign and development efforts in recent
years have led to advancements in footwear products. Nike takes as many new strategies
to develop their marketing solutions to address the needs of both athletes and others
buyer in international arena. But now, it is the question for Nike that how much they are
capable to take competitive advantage from market by cleverly uses the marketing mix
and how long stays as pretty strong recognized company in worldwide.

If they gain the competitive advantage by using product innovative marketing strategy,
consider the key markets of China, Germany, Mexico, and Japan and established the new
distribution centers in worldwide then they will be able to ahead in competition as well as
sprints.

Assignment on Marketing Research 8

Case Study: Nike Sprints Ahead of the Competition, Yet Has a Long Way to Run

Assignment on Marketing Research 9