Question

1. Read the following case and answer the related questions:
Nike is the largest seller of athletic footwear, athletic apparel, and other athletic gear in the world, with
about 25 percent market share worldwide. It focuses on NIKE Brand and Brand Jordan product
offerings in seven key categories: running, basketball, football, men’s training, women’s training, NIKE
sportswear, and action sports. The company sells its products through a mix of independent distributors,
licensees, and subsidiaries in approximately 120 countries worldwide. Nike has grown from an $8,000
company in 1963 to a company with revenues of $34.4 billion for the year ended May 31, 2017.
In 2016, Nike spent an enormous amount of money. Nike’s sponsorship and endorsement commitments
amounted to $6.2 billion in 2016, up 32% from 2015. In order to make sure that this 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 and the world of sports. Nike has used
marketing research in understanding where 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 as strong. Marketing research surveys revealed that the awareness of Nike among soccer
and golf players was low, and Nike 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 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 partnerships help relate the excellence of the
athlete with the perception of the brand. Through focus groups and surveys, Nike discovered the
pyramid influence, which shows that the mass market can be influenced by the preferences 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 the company and what it
believes in. With Nike, this was, and remains, 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 athletes to design
new products by attempting to meet their individual goals. Explaining Nike’s strategy of celebrity
endorsements, Trevor Edwards, vice president of U.S. Brand Management, says that the sports figures,
such as Ronaldo, Michael Jordan, and Tiger Woods, who have endorsed Nike brands, all have
represented excellence in some way. Nevertheless, the athletes also have a personal side, such as their
drive to win or their ability to remain humble. All these qualities speak something about the Nike brand;
this not only benefits the brand but also helps to define what the Nike brand is and what it stands for.
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: the
ultimate athlete, the athletics participant, and the consumer who is influenced by sports culture. The
first segment is the professional athletes. The second constituency is the participants, those who
participate in sports and athletic activities but do not see themselves as athletes or as being part of the
larger sport. The third segment comprises those who influence others and are influenced by the world
of sports. These three different constituencies form three different consumer segments, and Nike uses
very different strategies for each.
Nike has always been an aggressive user of marketing 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. And football. And basketball. But Europe’s favorite game is
soccer. Nike placed its focus on major sporting events (World Cups and Olympics) and
celebrity athletes that are relevant to the European consumer. Marketing research in the form of focus
groups and survey research revealed that the best positioning for Nike shoes was one that enhanced
performance in the 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 Nike has used is to specifically design a product line for a certain market. Nike uses
marketing research to determine the lifestyles and product usage characteristics of a particular market
segment and then designs products for that segment. An example is the Presto line, which was designed
for a certain youth lifestyle. Nike focused on the lifestyle and designed the products around this group.
It also used marketing research to determine the most effective media to communicate with the target
market.
Nike launched its “Write The Future” Campaign in 2010 that made extensive use of social media in
partnerships with YouTube, QQ.com, and Facebook. It celebrated football’s pivotal moments and
allows fans around the world to connect with their heroes. It featured an action-packed film that brought
together some of the world’s greatest players to inspire football lovers and sports fans around the world.
Footballers could then use this creative to build their own Facebook campaign and be eligible for
rewards.
Because of these methods, the Nike logo is recognized by 97 percent of U.S. citizens, and its sales have
soared as a result. However, Nike faces a new concern: that it has lost its traditional image of being a
smaller, innovative company. It also faces future obstacles in maintaining brand equity and brand
meaning. Continued reliance on marketing research will help Nike to meet these challenges, associate
its brand with top athletes and performance, and enhance its image.
Conclusion
Nike used marketing research to build its brand into one of the most well-known and easily recognized
brands in the world. Nike’s strategy of celebrity endorsements, its expansion into Europe, and the
resulting stronger association with soccer are some of the steps taken by Nike to grow its brand. In the
coming years, as Nike expands to newer markets and capitalizes newer opportunities, it will have to
continue its reliance on marketing research and continue to associate athletes, performance, and the
brand.

Case Related Questions:
a) Nike would like to increase its share of the athletic shoe market. Define the managementdecision
problem (MDP).
b) Define an appropriate marketing research problem (MRP) and related research questions (RQs)
corresponding to the management-decision problem you have identified. (1+5 marks)
c) How can qualitative research be used to strengthen Nike’s image? Which qualitative research
technique(s) should be used, and why?

Answer 1

a). Managment Decision Problem (MDP)

A Management Decision Problem is whereby when a situation arises, and management of a company needs to make a decision which requires research and hence starts the research process. Nike has a decision to improve its Athletic Shoe market share, So that they have to undergo market research. The management decision problem asks what the decision manager needs to do. The management decision problem is action oriented. It is concerned with the possible actions the decision manager could take. How should the loss of market share be arrested? Should the market be segmented differently?

• The management decision problem focuses on symptoms
• Asks what the decision maker needs to do
• Action oriented
• Focuses on symptoms

b) Marketing Research Problem (MRP)

The marketing research problem ask what information is needed and how it can best be obtained. Research can provide the necessary information to make a sound decision. The marketing research problem is information oriented. It wants to determine what information is needed to make the best decision. It involves determining what information is needed and how that information can be obtained effectively and efficiently.

• Marketing research problem Asks what information is needed and
• how it should be obtained
• the marketing research problem focuses on underlying causes and
• Information oriented

Research Questions (RQ)

1. What technique should Nike do to increase the share of athletic shoe market?
2. Why are sales low for Athletic shoes?
3. What factors influence the customers to buy Atheletic Shoes?
4. How should the loss of market share be arrested?
5. Should the market be segmented differently?
6. What are the marketing techniques needed for different segments?

c). Qualitaive research

Qualitative research is a type of scientific research. In general terms, scientific research consists of an investigation that:

• seeks answers to a question
• systematically uses a predefined set of procedures to answer the question •
• collects evidence •
• produces findings that were not determined in advance
• produces findings that are applicable beyond the immediate boundaries of the study

Qualitative research shares these characteristics. Additionally, it seeks to understand a given research problem or topic from the perspectives of the local population it involves. Qualitative research is especially effective in obtaining culturally specific information about the values, opinions, behaviors, and social contexts of particular populations.

Qualitative Methods

The three most common qualitative methods, explained in detail in their respective modules, are participant observation, in-depth interviews, and focus groups. Each method is particularly suited for obtaining a specific type of data. •

• Participant observation is appropriate for collecting data on naturally occurring behaviors in their usual contexts.
• In-depth interviews are optimal for collecting data on individuals’ personal histories, perspectives, and experiences, particularly when sensitive topics are being explored.
• Focus groups are effective in eliciting data on the cultural norms of a group and in generating broad overviews of issues of concern to the cultural groups or subgroups represented.

Focus group Method

A focus group is a market research method that brings together 6-10 people in a room to provide feedback regarding a product, service, concept, or marketing campaign. A trained moderator leads a 30-90-minute discussion within the group that is designed to gather helpful information. The moderator arrives with a set list of 10-12 questions that will be shared with the group during their time together that are designed to elicit thoughtful responses from all the participants. The moderator’s goal is to hear from everyone and to encourage many different opinions and ideas to be shared.

Focus Group Format

During the focus group, the moderator takes participants through three different types of questions designed to gather as much information from them as possible. They include:

• Engagement questions. These are easy questions posed early on to introduce the participants to each other, to make them more at ease, and to familiarize them with the topic to be discussed, whether it’s reacting to a new ad campaign for coffee or thinking about self-driving cars.
• Exploration questions. Once participants have begun to relax and open up in the group, the moderator begins to ask deeper, probing questions about the topic and how the participants feel about it. These might include, “What makes you say that?” “and “What would be a better solution?”
• Exit questions. After the moderator is confident the group has shared all that it can, wrap-up questions are posed to confirm that everything has been said. These might include, “Is there anything I haven’t asked that I should have?”

Types of Focus Groups

Within the general category of focus groups are more specific types of groups that are designed for different scenarios. Some of these include:

• Mini focus groups. Fewer participants are used, bringing the number down from 6-12 to four or five consumers.
• Online focus groups. Consumers log into a website using video chat and participate remotely.
• Two-way focus group. Focus groups are often conducted behind one-way glass, where researchers can take note of what’s going on. In these types of groups, the whole group watches another and comments on what they observe and hear.
• Dual moderator focus group. Instead of one moderator in the room, there are two – one to facilitate the discussion and the other to take notes.
• Client participant focus group. When a representative of the company or product being studied watches or participates in the discussion.

Pros

Focus groups are one type of market research method that are popular because they:

• Are generally lower cost than other methods
• Can generate results very quickly
• Are easy to conduct
• Can supplement verbal responses with body language and other non-verbal cues
• Information gathered is in respondents’ own words, which is more accurate
• Technique is flexible and can be adjusted based on group behavior