project on nike

8/2/2019 Project on Nike

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EXECUTIVE SUMMARY

This marketing strategic plan has been written keeping in mind the Indian operations of Nike Inc. the

global sports shoe giant. It aims first, at analyzing the sports shoe industry India and finding a place in it

for Nike. It then sets out to describe the target audience for the product range and finally suggests a

host of marketing strategies and activities that will help Nike to achieve its target of becoming the #1

sports shoe brand in India.

The plan begins with a brief overview of the product category being dealt with, namely premium quality

sports shoes. It also dwells briefly on the history of the company and its current position and activities.

The project moves on to the crux of the matter the marketing plan to be followed by Nike in India.

Firstly, the objectives behind this plan and the core strategy are stated. Customers to be eventually

targeted are described and compared with competitors customer targets. After starting the objectives

and reasoning behind them, the actual marketing programs are described in detail. This includes aspects

such as pricing, advertising, promotion, sales, channels, and the company website. Suggestions are

made on each and every one of these aspects; improvements and innovations are recommended.

The plan then goes on to the customer analysis section. The customer base is identified and various

segments are pointed out. Various criteria and factors have been taken into consideration while

segmenting the market. We have also tried to ascertain why customers buy these products, how they

choose, and what factors matter most when making their decisions.

The last few pages of this marketing plan deal with the various ways in which the plan, once

implemented, can be monitored and controlled

TABLE OF CONTENT

1) INTRODUCTION 1-13

a) Background of the problem 1

b) About The Nike Industry 3c) Nike Maxsight 4

d) Industry Overview 5

e) Product Trend 8

2) RESEARCH METHODOLOGY 14-20

a) Research objectives 14

b) Research design 15

c) Data sources 15

i) Primary data 15

ii) Secondary data 15

d) Questionnaire design formulation 16

e) Sample design 17

f) Limitations of the research 20

3) COMPANY PROFILE 21-43

a) Nike Industries Ltd. A company profile 21

b) Recent Development 21

c) Future Plan 23

d) Risk and Concern 28

e) Literature Review 31

f) 4ps of Nike 40

g) SWOT Analysis 41

4) DATA ANALYSIS 44-63

5) CONCLUSION & FINDINGS 64-67


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6) RECOMMENDATIONS 68-75

a) OTHER SUGGESTION INCLUDE 69

7) ANNEXURE 76-82

8) BIBLIOGRAPHY 83

INTRODUCTION

BACKGROUND OF THE PROBLEM

Since the late 1980s, Business School marketing professor Itamar Simonson has looked for ways to

understand how consumers make choices. Much of his work debunks the accepted theory that giving

consumers what they want and making a profit are the most basic principles of marketing. Customers

may not know what they want, and second-guessing them can be expensive, says the professor who

teaches MBA and PhD marketing and consumer decision-making courses. In Simonsons words, The

benefits and costs of fitting individual customer preference are more complex and less deterministic than

has been assumed. Thats because customer preferences are often ill-defined and susceptible to

various influences, and in many cases, customers have poor insight into their preferences. In one of his

recent papers, Simonson tackles the issue of one-to-one marketing and mass customization. Supporters

of these marketing approaches have suggested that learning what customers want and giving them

exactly what they want will create customer loyalty and an insurmountable barrier to competition.

In an example taken to the extreme in the 2002 movie Minority Report, Tom Cruises characte r runs

through a shopping mall past talking billboards that recognize him by name and urge him to buy

products he had earlier expressed an interest in such as jeans and Ray-Bans, the ultimate in

personalized advertising. But Simonson has this to say: The fact that consumer preferences are often

fuzzy, unstable, and manipulatable is unlikely to change. So, the effectiveness of methods to give

customers exactly what they (say they) want has been grossly exaggerated. His take on the long-heldassumption that individual marketing will supplant targeted marketing is not so fast. In studies, he has

learned that even when customers have well-defined preferences and receive offers that fit those

preferences, it is far from certain that the response to such offers will consistently be more favorable

than those directed at larger market segments.

Its all psychology. Consumers with well-defined preferences may be skeptical that a marketer could

match expectations. Those who dont know what they want may not ever see the fit with what the seller

wants them to buy. So, individualized offers depend on customers preferences &; how the offer was

extended &; and on trust. Effective individual marketing requires not only an understanding of

individual preferences and matching offers to those preferences, but also a thorough familiarity with the

various factors that impact customers responses, Simonson writes. This is a tall order, one that some

companies have been able to fill, at least to some extent. For example, Amazon keeps track of

customers purchases and suggests other books they might like. Dell builds computers from mass-made

parts to customers specifications. But Simonson argues some companies can take the concept too far,

like the Custom Foot chain of shoe stores that took detailed measurements and specifications from each

customer to design one-of-a-kind shoes. Custom Foot didnt take into account that some customers

were put off by the individualized attention, Simonson says, and felt obligated to buy the shoes because

the store went to so much trouble. They often didnt come back. So knowing only the customer

preferences is not enough. It is required to understand other aspects of customer behavior. Kipping this

in mind, present study will find out and analyze consumer behavior of Nike shoes with reference to

ladies segment.


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THE WEAR

Nike MaxSight is a 30-day lens, though most athletes will wear them selectively and for short durations.

Lenses come in six-pack packaging. Nike MaxSight is available with or without a correction, thereby

making it accessible to athletes whether they wear contacts or not.

THE HISTORYNike began exploring the Nike Max Sight technology in 1997, conducting an initial clinical project, then

subsequent research projects using collegiate athletes. Oregons Pacific University baseball players were

the first athletes to undergo testing. Coach Greg Bradley requested that he be allowed to try them

before his players. Hed never worn contacts, says Dr. Reichow. He took two pitches and turned

around and said, Ive never seen a ball that distinct and clear. Put them on anybody who wants them.

INDUSTRY OVERVIEW

Bill Bowerman said this couple of decades ago. The guy was right. It defines how he viewed the world,

and it defines how Nike pursues its destiny. Ours is a language of sports, a universally understood

lexicon of passion and competition. A lot has happened at Nike in the 30 years since we entered the

industry, most of it good, some of it downright embarrassing. But through it all, we remain totally

focused on creating performance opportunities for everyone who would benefit, and offering

empowering messages for everyone who would listen.

We feel lucky to have a genuine, altruistic reason to be: the service of human potential. That's the great

benefit of sports, and we're glad to be in the middle of it.

What started with a handshake between two running geeks in sleepy Eugene, Oregon, are now the

world's most competitive sports and Fitness Company. The World Headquarters is in Beaverton, Oregon.

The Pacific Northwest is Nike's hometown, but like so many ambitious souls, we have expanded our

horizons to every corner of the world. Nike employs around 23,000 people, and every one of them is

significant to our mission of bringing inspiration and innovation to every athlete in the world.

Along the way Nike joined up with some great partner companies that help extend our reach within and

beyond sports.

Cole Haan offers casual luxury footwear and accessories out of New York City and Yarmouth, Maine.

Bauer Nike Hockey, based in Montreal, Quebec, is the world's leading manufacturer of hockey equipment

and a wholly owned subsidiary of Nike, Inc.

Nike partnered with Hurley International, a premium teen lifestyle brand founded by 20-year industry

veteran Bob Hurley based in Costa Mesa, California.

In 2003, Nike completed the acquisition of Converse, the globally recognized footwear brand with nearly

a century of sports heritage, and home of the perennially popular Chuck Taylor All-Star and Jack Purcell

footwear.

Exeter Brands Group: In August 2004, Nike created the Exeter Brands Group, a wholly owned

subsidiary, dedicated to building athletic footwear and apparel brands for the value retail channel. This

portfolio of brands includes the Official Starter Properties LLC and Official Starter LLC which are the sole

owners and licensors of the Starter, Team Starter and Asphalt brand names as well as master licensee of

the Shaq and Dunkman brands, a line of athletic apparel, footwear and accessory products for the value

retail channel.

Separate business units within the Nike brand include The Jordan/Jumpman 23 brand and Nike Golf.

As small as we feel, the Nike family is a fairly vast enterprise. We operate on six continents. Oursuppliers, shippers, retailers and service providers employ close to 1 million people. The diversity


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inherent in such size is helping Nike evolve its role as a global company. We see a bigger picture today

than when we started, one that includes building sustainable business with sound labor practices. We

retain the zeal of youth yet act on our responsibilities as a global corporate citizen.

If you have a body, you are an athlete. And as long as there are athletes, there will be Nike.

PRODUCT TREND

Bovine skin was by far the most preferred leather material, followed by goat/kid/lamb/sheep skin and

crocodile skin.

Respondents overwhelmingly preferred the color black and, to a lesser extent, dark brown. For

handbags/briefcases, popular colors included light brown, white and red. Consumer Segments with the

Biggest Spending Power Male professionals, managers and executives are the segment with the biggest

spending power for now and in the coming three years. Other major consumer segments include male

office workers; sole proprietors/business owners; female office workers; and female professionals,

managers and executives.

The Competitiveness of Hong Kong Brands/Suppliers of Leather Consumer Goods. Most retailers

consider Hong Kong brands to be either very competitive or quite competitive in both high-end and mid-

range segments, but less competitive in the low-end segment. The competitiveness of Hong Kong

brands mainly rests on their product style/design and quality, with most respondents picking those as

the major reasons behind the attractiveness of Hong Kong brands in the high-end and mid-range

segments respectively.

PRODUCT PROFILEApart from delivering a pair of comfortable sports shoes Nike also provides a number of value-added

features with its products. The features that are a part of every Nike sports shoe are as follows.

High Performance Sports Shoes: Nike has patented the Air system and has made it into a regular

feature in most of its models. Many models feature an air pocket in the shoe that reduces the weight of

the shoe and reduces pressure on the heels. Besides the overall design and compactness of the shoes

have made it a favorite of many professional athletes around the world.

Comfort: Nike shoes are renowned all over the world for the comfort they provide. Well padded and

cushioned, they provide a tremendous level of comfort to the wearer and reduce the strain to his feet

while playing.

Lightweight: This attribute is in line with the two described above. A lightweight shoe provides greater

mobility and eases the pressure on the feet of the wearer.

Durability: People purchasing a pair of shoes at such a high price often feel that they have made aninvestment. They would obviously want to see their shoes last a long time. To prove this point we draw


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the example of the authors of this marketing plan. All of us own a pair of Nikes and have been wearing

them for well over two years a symbol of the durability of Nike shoes.

Style: Nikes designs are considered to be the most stylish in the industry and beat all others as far as

looks are concerned. Attractively packaged, it is a delight to bring a pair home. Add to this the Swoosh

the most recognizable symbol in sports and you have a product that would give the user a definite

sense of pride.

Nike shoes also come with a guarantee card that enables the owner to return it in case of manufacturing

defects. However, owing to the fact that the company implements strict quality control measures,

coming across a defective pair in a store are a rarity. The most recent additions to their line are the Nike

6.0 and Nike SB shoes, designed for skateboarding. Nike has recently introduced cricket shoes, called

Air Zoom Yorker, designed to be 30% lighter than their competitors'.[ Nike positions its products in such

a way as to try to appeal to a "youthful....materialistic crowd".[5] It is positioned as a premium

performance brand.

NIKE 6.O

NIKE SB

RESEARCH METHODOLOGY

Research comprise defining and redefining problems, formulating hypothesis or suggested solutions;

collecting, organizing and evaluating data; making deductions and reaching conclusions; and at last

carefully testing the conclusions to determine whether they fit the formulating Hypothesis.

In short, the search for Knowledge through Objective and Systematic method of finding solutions to a

problem is Research.

RESEARCH OBJECTIVES

To study the tastes, preferences, and buying behavior of consumers in case of footwear of Bata.

To analyze buying behavior of ladies segment of consumers.

To recommend strategies to Nike to increase sales in ladies segment.

The main objectives of this study are:


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Working of Insurance Plans

SWOT analysis of the product sold

Comparative study with the competitors

RESEARCH DESIGN

TYPE OF RESEARCH: -

Descriptive research

Descriptive research includes Surveys and fact-finding enquiries of different kinds. The main

characteristic of this method is that the researcher has no control over the variables; he can only report

what has happened or what is happening.

DATA SOURCES

There are two types of data.

Source of primary data for the present study is collected through questionnaire and answered by

consumers of Nike shoes. The secondary data is collected from journals, books and through Internet

search.

PRIMARY DATA

The data that is collected first hand by someone specifically for the purpose of facilitating the study is

known as primary data. So in this research the data is collected from respondents through

questionnaire.

SECONDARY DATA

For the company information I had used secondary data like brochures, web site of the company etc.

The Method used by me is Survey Method as the research done is Descriptive Research.

RESEARCH INSTRUMENTS

Selected instrument for Data Collection for Survey is Questionnaire.

QUESTIONNAIRE DESIGN FORMULATION

Under this method, list of questions pertaining to the survey are prepared for marketing staff of

consumers of Nike shoes.

Questionnaire has structured type questions as well as unstructured type questions. Structured objective

type questions are prepared for the respondents with fixed response categories. Some of the questions

are of multiple-choice type. The questions have more than one alternative.

Questionnaire: - A questionnaire consists of a set of questions presented to respondent for their

answers. It can be Closed Ended or Open Ended

Open Ended: - Allows respondents to answer in their own words & are difficult to Interpret and Tabulate.

Close Ended: - Pre-specify all the possible answers & are easy to Interpret and Tabulate.

TYPES OF QUESTION INCLUDED:

DICHOTOMOUS QUESTIONS

Which has only two answers Yes or No?

MULTIPLE CHOICE QUESTIONS

Where respondent is offered more than two choices.

IMPORTANCE SCALE

A scale that rates the importance of some attribute.


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RATING SCALE

A scale that rates some attribute from highly satisfied to highly unsatisfied and very inefficient to

very efficient

SAMPLING UNIT: -

Who is to be surveyed? The marketing researcher must define the target population that will besampled.

The sample Unit taken by me; General public of different age group, different gender and different

profession

EXTENT:-

Where the survey should be carried out?

I have covered entire residential area of Delhi city for the survey

TIME FRAME:-

When the survey should be conducted?

I conducted my survey for 8weeks from 10th may to 10th July

SAMPLING FRAME:-

The source from which the sample is drawn

SAMPLING TECHNIQUE: -

How should the respondent be chosen?

In the Project sampling is done on basis of Probability sampling. Among the probability sampling design

the sampling design chosen is stratified random sampling.

Because in this survey I had stratified the sample in different age group, different gender and different

profession

SAMPLE SIZE

Consumers of shoes, 50 nos

STEPS FOLLOWED IN COMPLETING THE STUDY

(i) Libraries at (a) Indian Council for Applied Economic Research (ICAER), (b) Indian Institute of

Technology, (IIT) Delhi, (c) Council of scientific and industrial Research (CSIR) (d) PHD chamber of

commerce, are visited. Management / marketing books, journals are consulted.

(ii) Internet sites containing information on Nike shoes & marketing are browsed.

(iii) Sample survey was conducted.

(iv) Data was thoroughly checked for error.

DATA PROCESSING METHODOLOGY

(i) Once the primary data have been collected, they are (I) edited inspected, corrected and modified.

(ii) Tabulation bring similar data together and totaling them in meaningful categories.

Questionnaires are edited both in the field and later in home. Field editing took place just often the

interview. Generally editing is required for open type of questions. Brief notes or symbols are frequently

used during the interview to initially record the interviewers response since it was not desirable to

interrupt the flow with lengthy note taking. Then immediately after the interview, brief notes are

respondent. The responses are thoroughly checked in home for incorrect, inconsequential or

contradictions categories are developed only often the replies has been reviewed. This review provided a

feel for the pattern of answers and thus determine what categories best represent the answers.

The collected data are placed into an order. Percentages of respondents answered similarly are

calculated and placed in a table. Then this is interpreted. This involved drawing conclusion from the

gathered data. Interpretation changes the new information immerging from the analysis into information

that is pertinent or relevant to the study.


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CONCLUSION WAS DRAWN BASED ON THE SURVEY FINDINGS

Finally recommendation was made to improve the sales strategy of Nike shoes to increase the sales

volume in ladies segment.

SAMPLE DESIGN

THE BASIS OF SAMPLING: -Consumers of Nike shoes are chosen randomly, so that unbiased, representative sample may be

obtained.

LIMITATIONS OF RESEARCH

The geographical area was very much limited to residential area & so the results are not particularly

reflection of the current behavior.

BIASES AND NON-COOPERATION OF THE RESPONDENTS.

The collected data are placed into an order. Percentages of respondents answered similarly are

calculated and placed in a table. Then this is interpreted. This involved drawing conclusion from the

gathered data. Interpretation changes the new information immerging from the analysis into information

that is pertinent or relevant to the study.

Due to limited time period and constrained working hours for most of the respondents, the answers at

times were vague enough to be ignored.

Most of the people in India take their Nike Shoes in the period preceding March & so the response to

initial contacts were not all encouraging and that has been the primary reason in the inability to quantify

the results large enough so as to deduce any relevant outcomes.

COMPANY PROFILE

NIKE INDUSTRIES LTD. A COMPANY PROFILE

Nike India Ltd (BIL) is Indias largest footwear company. Nike first established itself in India in 1931 andcommenced manufacturing shoes in Batanagar in 1936. The company has its Headquarters in Kolkata

and manufactures over 33 million pairs per year in five plants located in Batanagar (West Bengal),

Faridabad (Haryana), Bangalore (Karnataka), Patna (Bihar), Hosur (Tamil Nadu). It secures its leather

supply from two tanneries in Mokamehghat (Bihar) and Batanagar (West Bengal). It has a distribution

network of over 1,500 retail stores and 27 wholesale depots provide excellent access to consumers and

wholesale customers throughout India.

As on December 31, 2006, the Canadian parent had a 51 per cent stake while institutional holding was

about 13 per cent.

RECENT DEVELOPMENTS

Nike India has said that its Faridabad and Mokamehghat units are being taken over by Fashion Shoe

Private Ltd and BDCL Enterprises Pvt Ltd, respectively. The company is also enabling the buy back

provision in its Articles of association to enable buy back of shares.

The assets and liabilities of both the units will be transferred to these companies and shares will be

offered in the agreed ratio to the existing shareholders of Nike India Ltd on a record date, which will be

fixed by the Calcutta High Court.

While retail sales have increased both in value and volume, wholesale sales have declined due to

restriction of supplies as a means to recover customersoutstanding. General recession and sluggish

market conditions in the industry also have had a direct impact on lower sales and profitability.

Resistance of consumers to price rises in popular volume products as well as discounts to clear slow-

moving stocks and under utilization of production capacity adversely affected the operational results.

The lockout declared at the Peenya factory on October 1, 2007 due to serious industrial relation

problems and non-compliance with the tripartite settlement has been withdrawn. The footwearmanufactured in this factory, which was shifted to the companys other factories and associated


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manufacturers, will now be gradually produced within the factory. The commencement of production

from this factory will help in re-cooping the minimal loss being suffered by the company from this

lockout.

In Simonsons words, The benefits and costs of fitting individual customer preference are more complex

and less deterministic than has been assumed. Thats because customer preferences are often ill-

defined and susceptible to various influences, and in many cases, customers have poor insight into theirpreferences. In one of his recent papers, Simonson tackles the issue of one-to-one marketing and mass

customization. Supporters of these marketing approaches have suggested that learning what customers

want and giving them exactly what they want will create customer loyalty and an insurmountable barrier

to competition.

But Simonson has this to say: The fact that consumer preferences are often fuzzy, unstable, and

manipulatable is unlikely to change. So, the effectiveness of methods to give customers exactly what

they (say they) want has been grossly exaggerated. His take on the long -held assumption that

individual marketing will supplant targeted marketing is not so fast. In studies, he has learned that

even when customers have well-defined preferences and receive offers that fit those preferences, it is

far from certain that the response to such offers will consistently be more favorable than those directed

at larger market segments.

Its all psychology. Consumers with well-defined preferences may be skeptical that a marketer could

match expectations. Those who dont know what they want may not ever see the fit with what the seller

wants them to buy. So, individualized offers depend on customers preferences &; how the offer was

extended &; and on trust. Effective individual marketing requires not only an understanding of

individual preferences and matching offers to those preferences, but also a thorough familiarity with the

various factors that impact customers responses,Simonson writes. This is a tall order, one that some

companies have been able to fill, at least to some extent. For example, Amazon keeps track of

customers purchases and suggests other books they might like. Dell builds computers from mass-made

parts to customers specifications. But Simonson argues some companies can take the concept too far,

like the Custom Foot chain of shoe stores that took detailed measurements and specifications from each

customer to design one-of-a-kind shoes. Custom Foot didnt take into account that some customers

were put off by the individualized attention, Simonson says, and felt obligated to buy the shoes becausethe store went to so much trouble. They often didnt come back. So knowing only the customer

preferences is not enough. It is required to understand other aspects of customer behavior. Kipping this

in mind, present study will find out and analyze consumer behavior of Nike shoes with reference to

ladies segment.

FUTURE PLAN

The management says that it is not averse to outsourcing if it worked out cheaper. It is also open to the

idea of importing shoes - mostly from China - if it works out cheaper.

Nike and Reebok India Company have announced an agreement to foray into retailing partnership for

sale of Reebok and Rockport footwear in Nike outlets. The partnership entails retailing a range of sports

shoes for walking, running, tennis and training for personal fitness and sports ranging between Rs 900-

2,500.

An attractive valuation compared to its peers is the main trigger for the scrip. Besides, the companys

aggressive focus on retailing and revamping of business (a division into shoes and apparels) is also

helping sentiment for the scrip. Plans are afoot to start selling apparel in India made by the joint venture

North Star. Theres talk that the company is planning on a voluntary retirement scheme (VRS) to cut

costs.

For the third quarter ended 30 September 2007, Nike India reduced its losses to Rs 5.68 crore (Rs 8.51

crore) on a 9.2% increase in net profit to Rs 154.27 crore (Rs 141.26 crore). Despite reducing its losses

for the quarter, Nike India has, over the last few quarters, been continuously recording weak

performances as a result of an overall slowdown in the industry due to lower consumer spending.

Increasing domestic competition, particularly from the unorganized sector, has also been eroding into

the companys market share.The company is finding it difficult to maintain its market share in a highly price-sensitive Indian market,


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despite having strong brand recall.

97% of the companys revenues are from the domestic market while the remainder is from exports. Nike

India is the biggest player in the Indian shoe market.

Nike Indias major problems include its high cost of production and low emphasis on ma rketing. The

company may be able to address the first problem through outsourcing products. Batas brand imagehas been restricted to that of a company that emphasizes on utilitarian products more than trendy ones.

Customers feel the company is lacking in innovation. Hence, their preference has shifted to other local

brands.

Nike India has a large marketing network with over 1,500 showrooms, 27 wholesale depots and eight

retail distribution centers across the country.

Besides, there is a network of 300 exclusive wholesalers servicing 25,000 dealers all over the country.

However, in spite of this and the license to sell other brands like Nike, Hush Puppies and Lotto, Nike has

not been able to improve sales consistently. The recent rise in sales during the third quarter ended

September 2006 can be attributed to the festive season. Recently, it also entered into a retailing tie-up

for Lee Cooper shoes.

Nike India has also been trying to focus on aggressive marketing of its product. The company has been

going through a period of transition for the past one year. With the expansion of the retail industry in

New Delhi and Mumbai, the company has recently decided to shift its marketing operations to Delhi in

order to provide value shopping for its customers. However, the manufacturing activity and the

registered office will continue at Kolkata.

Nike India has plans to invest in sophisticated machinery to retain its niche place in manufacturing. The

company has put a fresh focus to its retail business. The company has decided to cleanse its wholesale

operation by building relationships with credit-worthy buyers.

It is to the companys credit that it has lately overhauled its marketing set -up into a four-tier retail

structure that will be stocked with products matching the areas customer profile. A Nike outlet in an upmarket place will offer a distinctly different range of footwear from another in the suburbs.

At the top of the four-tier structure will be international stores stocking brands like Nike and Reebok.

Next will be city stores, located in up market areas and catering to middle and high-income groups. The

company has identified the brands Power, North Star, Bubble gummers, Marie Claire and Hush Puppies

for the top end of the market. Third in line will be family stores at commercial locations displaying basic

and mid-range footwear. At the bottom will be bazaar stores that will basically aim at driving volume

sales at lower price points.

The management of Nike India is taking major steps in terms of improving market penetration, focus on

stores configuration, distribution logistics, better industrial relations and overhead rationalization.

Launching of new products always remained at the center stage of the companys operations.

At the same time, with the opening up of the economy, more and more goods will be imported from

China. This may significantly affect Nike Indias prospects unless it manages to wean away customers

with a drastic cut in costs. Alternatively, like other Indian manufacturers, even Nike may consider

relocating its manufacturing bases in China. However, it is not that easy a task to undertake.

Nike India, the 51% subsidiary of Toronto-based Nike Shoe Organization, remains the biggest player in

the Indian shoe market, though its share in footfalls has been decreasing over the years.

Now in a determined bid to straddle across all product and price points, Nike India has decided to

restructure its 1,300-outlet strong retail business division along specific customer segments into Bazaar,

Family, and City and Flagship stores.

Nike India has decided to appoint brand managers for each product group in a newfound aggression to


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tackle dwindling sales. Each of these managers assisted by a dedicated team would be like a brand

champion responsible for procurement, production, advertisement, promotion and re-supply.

Nike India has roped in Ogilvy & Mother for devising its festive season advertising, side-stepping JWT,

its incumbent agency. The job involves developing special communication directed towards the festival

season shoppers.

Nike India Ltd (BIL) is Indias largest footwear company selling over 60 Mn pairs per year in India, USA,

UK, Europe, Middle East and Far East. BIL has a market share of 60% in leather products and 70% in

canvas shoes.

The footwear industry in India is highly fragmented and dominated by the unorganized sector. The

industry size is around Rs 75 Bn and is growing at around 10% annually. It competes with Indian

players such as Liberty Shoes, Phoenix International, Mirza Tanners, Tatas, Action Shoes and Lakhani

Shoes and global players like Adidas, Reebok and Nike. Accessories and garments contribute footwear

sales account for more than 96% of sales while the balance. The turnover break up is as follows

Products Volume (%) Value (%)

Rubber and Canvas 50: 30

Leather 29 :57

Plastic 21: 9

GROWTH DRIVERS

The company has a very comprehensive distribution network which comprises its own and franchise

stores. It has 1500 showrooms, 25 wholesale depots and 8 distribution centers.

POPULAR BRANDS

Nike owns brands like Hush Puppies, Signor, Marie Claire Power, Sandak, Hawai, Naughty boy and

Ambassador. It also distributes other brands such as Nike and Lotto.

Focus on middle-class and upper class Nike will continue to focus on middle and upper class customers.

It is introducing budget stores which will help customers to identify with the brand. It is also increasing

focus on rural thrust for volume growth in the low-priced footwear segment.

RISK AND CONCERN

Lifting of quantitative restriction on import of footwear will lead to the market being flooded by imports.

Labor issues have always bothered BIL and this resulted in disruption of manufacturing activities on

numerous occasions. Competition is hotting up in the domestic market due to popular brands such as

Gaitonde, Red Tape, Lotus Bawa and Tatas. These brands are gaining market share especially in the

premium segment and in this segment BIL has no significant presence.

Latest Results Sales for Q3 FY2000 increased by 5.5% yoy to Rs1.7bn. profits dropped by 90% yoy to

Rs3.8 Mn due to lower operating margins and higher depreciation and interest. Depreciation increased

by 6.3% yoy to Rs 37 Mn while interest cost increased by 9.3% yoy to Rs 23.4 Mn.

Operating margins dropped by 3.3% due to increase in input cost. The Peenya plant has not commenced

operations despite lifting up of the lock out since July 3, 2007.

VALUATION

BILs long-term success is dependent on the how labour issue is tackled and the flexibility, which it can

adopt to meet threat of imports and competition from local footwear companies. Long term investors

with a two-year investment horizon can accumulate the stock at current levels. It is also increasing focus

on rural thrust for volume growth in the low-priced footwear segment.

Lifting of quantitative restriction on import of footwear will lead to the market being flooded by imports.

Labor issues have always bothered BIL and this resulted in disruption of manufacturing activities on

numerous occasions.


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Competition is hotting up in the domestic market due to popular brands such as Gaitonde, Red Tape,

Lotus Bawa and Tatas. These brands are gaining market share especially in the premium segment and in

this segment BIL has no significant presence.

Sales for Q1 CY2001 decreased marginally by 0.6% yoy to Rs 1590.7 mn. There was a net loss of Rs

30.2 mn as against a profit of Rs 39.6 mn in the corresponding period of the previous year. The loss is

due to lower operating margins and higher interest.BILs long-term success is dependent on the labor issue and the flexibility, which it can adopt to meet

threat of imports and competition from local footwear companies. Long term investors with a two-year

investment horizon can accumulate the stock at current levels.

FINANCIAL HIGHLIGHTS

(In Rs Million) 200012 (12) 199912 (12) 199812 (12) Q1200103

Q1200003

Sales 7,315.70 7,103.90 6,353.20 1590.7 1600.9

% Growth 2.98 11.82 (0.6)

Net Profit 304.60 242.60 166.30 (30.2) 39.6

% Growth 25.56 45.88 (176)

EPS(Rs) 5.90 4.70 3.20 3.08

% Growth 25.53 46.88

Ratios 200012 (12) 199912 (12) 199812 (12) Q300009 Q399909

OPM(%) 9.77 9.08 7.16 1.09 6.9

NPM(%) 4.16 3.42 2.62 2.5

ROE(%) 8.95 7.44 5.31

Nike understated 9 month losses -

Brief Financials (in Rs. Mn.)Detailed Quarterly

Period ending (months)30-Sep-2007 (9)31-Dec-2006

(12)31-Dec-2006 (12)

Net sales 4980.206461.177172.91

Other Income42.1063.6165.21Total Income5022.306524.777238.12

Cost of goods sold4974.706471.797051.76

OPBDIT47.6052.98186.36

PAT-117.20-74.1039.80

Gross Block-2191.072062.26

Equity capital-514.22514.22

EPS (Rs.)--1.440.77

DPS (Rs.)-0.000.75

BV (Rs.)-37.2738.71

P/E range (x)-0.0 - 0.00.0 - 0.0

Debt / Equity (x)-0.320.26

Operating margin (% of OI) 0.90.82.6

Net margin (% of OI)-2.3-1.10.5

As on 30 June 2007, the public, institutions and foreign bodies held

31.23%, 13.91% and 0.16% stake in the company, respectively

LITERATURE REVIEW

The study of consumer behavior has evolved since the Information Processing Model (Bettman, 1979)

assumed that the individual is logical in his/her buying process. This model was criticized because it

failed to treat different consumption phenomena motivated by symbolic meanings (Holbrook and

Hirschman, 1982). Individuals are not always looking for efficiency and economy, but also for

distraction, aesthetic, expression, etc. (Boyd and Levy, 1963). Calling for a broadening of theoretical

frameworks of consumer behavior, many authors pleaded in favor of the study of all consumption forms

(Holbrook, 1986), being inspired by European semi logy and American semiotic (Levy, 1959, 1963,1981; Hirschman, 1980; Kehret-Ward, Johnson and Louie, 1985; Mick, 1986; Holbrook, 1986;


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OShaughnessy and Holbrook, 1988; Nth, 1988; Stern, 1988; Grafton-Small and Linstead, 1989).

These are the study of signs, meanings and production of symbols. Fantasy, emotion and pleasant

aspects of consumption were then tackled from an experiential point of view. The Experiential View is a

phenomenological perspective that perceives consumption as a primary state of consciousness having a

variety of symbolic meanings, responses and hedonist criteria (Holbrook and Hirschman, 1982;

Olshavsky and Granbois, 1979). The basis of the traditional Information Processing Model is the

optimization of the utility of a product under the basis of a utilitarian evaluation of its tangiblecharacteristics. Nevertheless, it neglects emotional aspects. On the other hand, the Experiential View

leaves out different factors such as economic conditions, expectations, some elements of the marketing

mix (price, distribution), perceived risk and conflicts, but mostly the social influence of the consumers

reference groups (Holbrook and Hirschman, 1982; Business Central Europe, 1994) which is the aim of

the Symbolic Interactionism Perspective. Acquisition, possession and consumption are activities taking

place in a process of impressions creation or identity management which is, according to Belk (1978), an

interactive process concerning both the image of goods consumed and that of the individuals consuming

them. The Symbolic Interactionism Perspective deals with the relationship between consumers and the

products they consume, and suggests that a significant proportion of consumption behaviors consist of

social behaviors, and vice versa (Solomon, 1983). This leads us to consider the importance of

socialization processes (family, reference groups) through which individuals learn the meanings of

symbols and those of consumption. With the aforementioned meanings being negotiated and built

through interactions with others, consumption is not only an individual activity, but also a social process

of goods definition (Gallant and Kleinman, 1983). Since individuals are often motivated to acquire

products according to what they mean to them and to members of their social reference groups (Leigh

and Gabel, 1992), their behavior is subject to the pressures of cultural norms and the expectations of

socialization institutions rules such as those coming from family and other reference groups (Faber,

OGuinn and McCarthy, 1987; Engel, Blackwell and Miniard, 1993). Thus, Symbolic Interactionism

Perspective considers the human spirit as fundamentally social, and dependent on shared symbols. The

symbols being generated at a global level (Geertz, 1973; Solomon, 1983; McCracken, 1986, 1988; Leigh

and Gabel, 1992), the Symbolic Interactionism Perspective accepts as precept the fact that society and

its culture precede every individual action, and that a cultural consensus results from interactions,

communication, and negotiation between social actors (Charon, 1989).

If, at a conceptual level, the consumption good becomes an instrument of communication, at anoperational level, image variables may be regarded as the intangible attributes of the product that carry

cultural and social meanings. According to Erickson, Johansson and Chao (1984), an image variable is

defined as some aspect of the product that is distinct from its physical characteristics but that is

nevertheless identified with the product. The image variables emerge from four cognitive

representations individuals have of their environment: the symbolism of advertising, the celebrity

endorsement, the brand, and the country of origin of the product.

The made-in is considered by Dichter (1962) as the fifth element of the marketing mix, and is defined as

the country where are located the corporate headquarters of the organization doing the marketing of the

product or the brand (Johansson, Douglas and Nonaka, 1985). The country of origin carries a rhetoric

that influences consumers preconceptions towards the products of a country. Its meaning can be

conceived as an indication serving as a basis of evaluation (Bilkey and Nes, 1982), when one considers a

product as a bundle of information. Consequently, according to Kaynak and Cavusgil (1983), the images

of a foreign country that are formed by consumers are made of cognitive, affective and behavioral

components. The first one represents the perceived characteristics of the country. The second one

concerns the appreciation or not of those characteristics, and the third one corresponds to the actions

about the country that the consumer feels are appropriate. A tendency to evaluate positively the local

production compared to imported production, and biases in favor of industrialized countries have been

found in previous studies (Bilkey and Nes, 1982; Cordell, 1992). This does not mean the consumer will

not buy the product, but rather that he is not inclined to do so (Schooler, 1971). When entering foreign

markets, sellers often face quotas, tariffs, and non-tariff barriers. In addition, they may face an

intangible barrier in the form of consumer bias on the basis of product origin (Schooler, 1971).

The informational value of the country of origin was also found to vary according to the level of

involvement of the consumer in purchasing the product and the presence of other cues such as brandname, guarantee and price (Ahmed and dAstous, 1993). In a recently published meta-analysis of


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country-of-origin effects, Peterson and Jolibert (1995) conclude that the average effect size is lower

(0.19) for purchase intention, higher (0.30) for quality/reliability perceptions and context dependent.

More specifically, they found that the characteristics of the study (research design, type of respondents,

study cues, sample size, stimulus context etc.) influence the relative effect of country-of-origin to a

lesser degree for quality/reliability perceptions than for purchase intention. However, the type of

respondents (students, consumers or businesspeople) had no influence on quality/reliability perceptions.

Stanford GSB marketing professor Itamar Simonson and Ran Kivetz, an assistant professor at Columbia

University, asked a group of 195 Columbia students to do; eat a lot of sushi.Participants were offered a

"frequent diner" program that would reward them for their patronage at various university dining

locations and given a card that would track their purchases. They were randomly assigned to one of two

groups those in the "low" requirement group were told they would have to purchase 12 sandwiches to

get two free movie tickets, whereas those in the "high" requirement group were told they would have to

purchase 12 sandwiches and 12 orders of sushi to get two free movie tickets. So, the second group had

to do much more to receive the same reward. Kivetz and Simonson also asked participants how much

they liked sushi relative to the typical student. The result? Students who liked sushi were much more

likely to join the "frequent diner" program that required them to purchase both 12 sandwiches and 12

orders of sushi. "It shows a common mistake that consumers make & if they see an offer that seems to

fit them better than other consumers, for example, a program that requires sushi-lovers to eat sushi

that fit completely colors their assessment of how attractive the offer is," Simonson says. "As a result,

by creating what appears like personal fit, marketers can attract consumers to frequency programs and

many other promotional offers." Kivetz and Simonson replicated these findings regarding influences on

participation in frequency, or loyalty, programs in studies with travelers interviewed at domestic

airports.The sushi study is among a number of studies Simonson has been conducting since the late

1980s about how consumers make choices. Much of his work debunks the accepted theory that giving

consumers what they want and making a profit are the most basic principles of marketing.

The theme that pervades Simonson's work is that customers may not know what they want and second-

guessing them can be expensive. In his words, The benefits and costs of fitting individual customer

preference are more complex and less deterministic than has been assumed." That's because, Simonson

says, "customer preferences are often ill-defined and susceptible to various influences, and in many

cases, customers have poor insight into their preferences."

In another recent paper, Simonson tackles the issue of one-to-one marketing and mass customization.

Supporters of these marketing approaches have suggested that learning what customers want and

giving them exactly what they want will create customer loyalty and an insurmountable barrier to

competition. In an example taken to the extreme in the 2007 movie Minority Report, Tom Cruise's

character Anderson runs through a shopping mall past talking billboards that recognize him by name and

urge him to buy products he has expressed interest in such as jeans and Ray-Bans; the ultimate in

personalized advertising. But Simonson has this to say: "The fact that consumer preferences are often

fuzzy, unstable, and manipulatable is unlikely to change. So, the effectiveness of methods to give

customers exactly what they (say they) want has been grossly exaggerated." His take on the long-held

assumption that individual marketing will supplant targeted marketing is "not so fast." That's because

consumers are very difficult to figure out, science fiction and technology notwithstanding. "Furthermore,

even when customers have well-defined preferences and receive offers that fit those preferences, it is

far from certain that the response to such offers will consistently be more favorable than those directed

at larger market segments."

It's all psychology. Consumers with well-defined preferences may be skeptical that a marketer could

match expectations. Those who don't know what they want may not ever see the fit with what the seller

wants them to buy. So, individualized offers depend on customers' preferences; how the offer was

extended & and on trust. "Effective individual marketing requires not only an understanding of individual

preferences and matching offers to those preferences, but also a thorough familiarity with the various

factors that impact customers' responses," he writes.

This is a tall order, one that some companies have been able to fill at least to some extent. For example,

Amazon keeps track of customers purchases and suggests other books they might like. Dell buildscomputers from mass-made parts to customers' specifications. But Simonson argues some companies


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can take the concept too far, like the Custom Foot chain of shoe stores that took detailed measurements

and specifications from each customer to design one-of-a-kind shoes. Simonson argues that Custom

Foot didn't take into account that some customers were put off by the individualized attention and felt

obligated to buy the shoes because the store went to so much trouble. They often didn't come back.

Indeed, an Internet search produces no Website.

Simonson, who has received many prestigious awards for his research on consumer behavior andmarketing, teaches MBA and Ph.D. marketing and consumer decision-making courses. The loyalty

program article is slated for publication in the Journal of Marketing Research this year.

Online customization gives consumers the opportunity to choose characteristics they want in a product

when they shop for it online. Many companies are looking at online customization as the future of online

business Janis Crow, Kansas State University marketing instructor, researched how people make choices

on the Internet. She recently studied consumers in an online environment and their ability to customize

several products - pizza, shoes, and electronic devices.

Crow said that her study posed two questions for respondents: first, how difficult is it to customize a

product, and secondly, how likely is the person to purchase the product he or she has customized?

All participants in the study chose to customize products. In terms of customers likelihood to purchase,

a greater number of customers made purchase decisions when there are more options to choose, she

said. However, it was slightly more difficult when more features were offered.

She created a website where people could customize products to their individual preferences and needs.

Crow selected three generic products: pizza, shoes, and a Personal Digital Assistant (PDA). Thirty-one

college students took part in the study.

"Students could customize the three products, and I provided a drop-down box on the site with

attributes to choose from," she explained. Consumers could click on a drop-down box to customize a

product they would want to purchase, she said. She found that more people relied on the default choices

rather than selecting other choices that were offered. She said, some research suggests that many

people do not want to put a lot of effort into purchase decisions. "A lot of times, people may not have

preferences already in mind," she said. When consumers have the chance to create preferences, thequestion is whether they rely on previous preferences or if they develop new ones, she said. In the

future, Crow says she will be studying strategies that consumers go through during purchase decisions.

"I will be studying decision processes to develop computer aids that could help the consumer reach their

purchase decision," she said.

Although her current project involves analyzing the consumer behavior of college students in an online

environment, in future projects she plans to analyze other demographic groups. Customization will be a

key business opportunity in the future for businesses online or in more typical shopping environments,"

Crow said.

She hopes her research will help consumers in making purchase decisions and help businesses

determine products to offer and how to offer them.

Hong Kong companies, including leather consumer goods suppliers, have shown a growing interest in

tapping the mainland consumer market after China's accession to the World Trade Organization and

gradual opening of its domestic market. For Hong Kong companies targeting this vast market, a good

understanding of the behavior of mainland consumers is necessary in order to formulate an effective and

suitable market strategy.

In view of this, the HKTDC conducted a survey study in four major mainland cities in February 2007. The

study was composed of two interlocking surveys. The first survey (survey on shoppers) successfully

interviewed a total of 1,000 shoppers of leather consumer goods in four major cities, namely Beijing

(BJ), Chengdu (CD), Guangzhou (GZ) and Shanghai (SH). The second survey (survey on retailers)

interviewed managers/officers-in-charge of major department stores in these four cities.

The survey study analyses leather consumer goods in terms of consumer behavior, the competitiveness


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of Hong Kong brands and the consumer segments with the greatest biggest spending power. The main

survey findings are as follows:

CONSUMER BEHAVIOR

Shopping locations, Department stores were the most preferred type of retailers, followed by outlets inshopping malls and chain stores. Product variety, guaranteed quality, brand choice, price, services and

store environment were cited as the major reasons for visiting a leather consumer goods store.

SHOPPING TIME

Thirty-eight percent of respondents visited leather consumer goods shops at least once a month.

Shopping during weekends is common. Other popular shopping occasions include National Day (1st

October), Chinese New Year (January/February), New Year's Day (January) and Labour Day (1st May).

MARKETING CHANNELS

Promotional activities in shopping malls and department stores are the most popular promotional and

sales activities, followed by discount/price reduction, TV commercials, discount coupons, promotional

stands, exhibitions, buy-one- (or more) gets-one-free.

PURCHASING POWER

On average, respondents owned 4.2 pairs of shoes, 1.2 pieces of wallets, 1.3 pieces of belts and 1.3

pieces of handbags/briefcases. Over the past 12 months, an average respondent's spending on leather

consumer goods was as follows:

- Shoes: RMB 597 (total) RMB 328 (per pair)

- Wallet: RMB 226 (total) and RMB 193 (per piece)

- Belt: RMB 220 (total) and RMB 194 (per piece)

- Handbag/briefcase: RMB 476 (total) and RMB 359 (per piece)

SELECTION CRITERIAWhen choosing leather consumer goods, product quality stood out as the principal consideration for

respondents, followed by product material, craftsmanship, style/design, price and brand.

POPULAR BRANDS

Most respondents considered brands important.

4PS OF NIKE

Nikes 4Ps comprised of the following approaches to pricing, distribution, advertising and promotion, and

customer service:

Pricing: Nikes pricing is designed to be competitive to the other fashion shoe retailers. The pricing is

based on the basis of premium segment as target customers. Nike as a brand commands high

premium.

Place: Nike shoes are distributed to Multi Brand store front and the exclusive Nike stores across

countries. While this necessitates a second trip for the customer to come and pick up the shoes, it allows

Nike to offer a much wider selection than any of the competition.

Promotion: Location, targeted advertising in the newspaper and strategic alliances serves as the

foundation of Nike advertising and promotion effort. The athletes and other famous sports personalities

are always taken as brand ambassadors. They form the prime building blocks of their portion strategy.

Product: The product range of Nike comprise of shoes, sports wear, watches etc. Its product history


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began with long distance running shoes in 1963. (Past 17 years: Air Jordan basketball shoes). Wide

range of shoes, apparel and equipment. For example:

Nike Oregon Digital Super Watch

Nike Presto Cee Digital Medium Watch

Nike Presto Cee Digital Small Watch

Nike Ron Analog Watch

Nike Triax 10 Regular Watch Nike Triax Armored II Analog Super Watch

Nike Women's Imara Fit Digital Watch

SWOT ANALYSIS

SWOT ANALYSIS NIKE, INC.

STRENGTHS

Nike is a very competitive organization. Phil Knight (Founder and CEO) is often quoted as saying that

'Business is war without bullets.' Nike has a healthy dislike of is competitors. At the Atlanta Olympics,

Reebok went to the expense of sponsoring the games. Nike did not. However Nike sponsored the top

athletes and gained valuable coverage.

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. If prices rise, and products can be made more cheaply elsewhere (to the same or

better specification), Nike will move production.

Nike is a global brand. It is the number one sports brand in the World. Its famous 'Swoosh' is

instantly recognizable, and Phil Knight even has it tattooed on his ankle.

WEAKNESSES

The organization does have a diversified range of sports products. However, the income of the

business is still heavily dependent upon its share of the footwear market. This may leave it vulnerable iffor any reason its market share erodes.

The retail sector is very price sensitive. Nike does have its own retailer in Nike Town. However, most

of its income is derived from selling into retailers. Retailers tend to offer a very similar experience to the

consumer. Can you tell one sports retailer from another? So margins tend to get squeezed as retailers

try to pass some of the low price competition pressure onto Nike.

OPPORTUNITIES

Product development offers Nike many opportunities. The brand is fiercely defended by its owners

whom truly believe that Nike is not a fashion brand. However, like it or not, consumers that wear Nike

product do not always buy it to participate in sport. Some would argue that in youth culture especially,

Nike is a fashion brand. This creates its own opportunities, since product could become unfashionable

before it wears out i.e. consumers need to replace shoes.

There is also the opportunity to develop products such as sport wear, sunglasses and jewellery. Such

high value items do tend to have associated with them, high profits.

The business could also be developed internationally, building upon its strong global brand

recognition. There are many markets that have the disposable income to spend on high value sports

goods. For example, emerging markets such as China and India have a new richer generation of

consumers. There are also global marketing events that can be utilized to support the brand such as the

World Cup (soccer) and The Olympics.

THREATS

Nike is exposed to the international nature of trade. It buys and sells in different currencies and so

costs and margins are not stable over long periods of time. Such an exposure could mean that Nike maybe manufacturing and/or selling at a loss. This is an issue that faces all global brands.


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The market for sports shoes and garments is very competitive. The model developed by Phil Knight in

his Stamford Business School days (high value branded product manufactured at a low cost) is now

commonly used and to an extent is no longer a basis for sustainable competitive advantage.

Competitors are developing alternative brands to take away Nike's market share.

As discussed above in weaknesses, the retail sector is becoming price competitive. This ultimatelymeans that consumers are shopping around for a better deal. So if one store charges a price for a pair of

sports shoes, the consumer could go to the store along the street to compare prices for the exactly the

same item, and buy the cheaper of the two. Such consumer price sensitivity is a potential external

threat to Nike.

DATA ANALYSIS

1. Demography of respondents

ANALYSIS:

It was observed that the majority of the respondents consist of professional from various fields like

engineers, software professionals, working executive etc. who effective form 38% of our database. While

36% were students from various fields. Others constitute designers and athletes etc. the further study is

carried on the buying behavior of the above mentioned categories of consumer, which shows that our

consumer is well educated and is very well informed about the product.

2. Consumers income level and spending capacity on shoes

ANALYSIS:

In the survey conducted a direct relation between the income level and the spending capacity was

observed. Also it was found that students were spending in the range of Rs 1000 Rs 3000 as compared

to the working class professionals who were ready to spend between Rs 3000 Rs 6000, since they

have higher spending power because of higher income levels.

SHOPPING SEASON

ANALYSIS:

Amongst the student and the professional it was found the consumer buying BEHAVIOR does not change

with respect to the seasons and occasion as most of the consumer would like to buy their shoes as and

when need arises, whereas the businessman generally do their shoes shopping during traveling or on

special occasions.

BRAND RECOLLECTION:

ANALYSIS:

When asked about reconciling a sports shoes brand about 70% of the respondent were able to recall

REEBOK or ADDIDAS were as rest were able to remember NIKE and FILA brands. This was due to the

fact that REEBOK has brand ambassador like RAHUL DRAVID and YUVRAJ SINGH.


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FACTOR INFLUENCING THE BUYING PROCESS:

ANALYSIS:

Among the various factors like social, psychological, personal and cultural factors it was observed that

the consumer give more preference to his personal choice and psychological factors like 50% of the

people consider comfort and they generally do not consider durability as an important aspect because

they believe that it comes along with the brand. Also the social factor like style was second most

important factor behind the consumer buying motives.

(B) COMPARISON WITH OTHER BRANDS

ANALYSIS:

In response to the question about giving, out of 100 point to the various factors affecting their buying

BEHAVIOR between NIKE and OTHERS following was observed:

OTHERS NIKE

a. Style ____20____ ___30_____

b. Price ____10____ ___10_____

c. Comfort _____30___ ___30_____

d. Brand ____10____ ___20_____

e. Durability _____30___ ___10____

this further shows that the consumer look for style in the NIKE more in comparison to the other brand

hence, gave their 30 points to it whereas 20 in case of other brands it was seen that the comfort

remains at equal place even while choosing a competitive brand.

BUYING FORCES

ANALYSIS:

It was observed that consumer is forced by no factors like peer pressure, family and friends and some

time people would like to buy a product because it is being endorsed by their favorite celebrity. It was

observed that the beside that personal choice of the respondent, the pressure from the friends plays an

important buying force for the students, while the peer and college in case of the professional and the

least pursuing factor is family which was seen in case of the respondents belonging to age group 35

years and above.

NO OF PEOPLE BUYING NIKESHOES & REEBOK SHOES:

ANALYSIS:

This question was asked to know the market capture by the REEBOK and the time period of association

of the customers with REEBOK. It was deduced that more than 75% of the respondents were using the

REEBOK shoes and were mainly associated with it for a period of 1 year or more. While the remaining

respondents were using either the NIKE or ADDIDAS brand shoes.


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CUSTOMER SATISFACTION:

ANALYSIS:

Because of the quality product offered by the REEBOK about 60% of the respondents were either very

satisfied or satisfied, while 10% did not gave any response as they were not using the REEBOK shoes.

3. Do you ask for a specific brand by name?

90% people say yes to this. and the remaining 10% say no.

4. Which brand do you generally use?

People in India prefer Nike the most as we can see that 24% % people prefer Nike sports wear. Then

comes Adidas and Reebok.

5. Has any sports shoes ad (seen on TV/in a magazine) made an impact on you?

YES NO IF YES, THEN WHY

NIKE 43 57

ADIDAS 63 37

REEBOK 45 55

ACTION 30 70

Most of the people are influenced with Adidass ad, then with Reebok and then Nike. The most un -

influential is that of action.

6. What according to you is the relative importance of the following?

V. Imp Imp. Not so Imp. Doesnt matter

PRICE 50 28 12 10

DURABILITY 55 45 0 0

BRAND IMAGE 40 20 15 15

COMFORTABLE 54 36 10 0

LOOKS 40 40 15 5


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By this we infer that the consumer wants the shoe to be durable that is of primary importance for them.

Then the price is also very important for them. The shoe should be comfortable. Along with that looks

and the brand image is also important.

7. What features of Nike do you like the most?

The most liked feature of Nike is the light weight shoe. Then it is the enhanced toe support. From here

we can infer that most important aspect for the consumers is the comfort they get from the shoes.

8. What range you prefer?

Larger number of people goes in for shoes that come under the range of Rs. 1500-3500. A s we know

that Nike is a premium brand 27% of the buy shoes that falls under the range of Rs. 3500-7500 and

lesser no. of people buy shoes ranging in between 3500 and 5500.

9. How often you buy Nike?

62% of the consumers buy Nike only once a year. Here we notice one thing that some dont buy Nike.

10. Are you satisfied buying Nike?

The people who buy Nike are fully satisfied buying it, their percentage is 64%. Only 15 % are not

satisfied buying it.


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11. Do you think Nike serves the purpose of being a good brand, for Sports wear?

56% of the people agree that Nike serves its purpose for being a sport brand. Only 27% people dont

agree with it.

12. Will you prefer Nike launching a new range which can serve the purpose of service class?

67% say yes to the idea of launching a new range for the service class. 36 dont have any idea of this.

CONCLUSION & FINDINGS

The specific brand objective of Nike India would be to build up its brand reputation, image and equity. A

brand is not simply a collection of products and benefits, but also a storehouse of value stemming from

awareness, loyalty, and association of quality and brand personality. A brand is a name, term, sign,

symbol or design or a combination of them intended to identify the goods or services of one seller or

group of sellers and to differentiate from those of competitors. In essence, a brand identifies the seller

or maker. It can convey up to six levels of meaning: Attributes, Benefits, Values, Culture, Personality

and User. If a company treats a brand only as a name it misses the point. The branding challenge is to

develop a deep set of positive associations for the brand.

Although these six meanings are noticeable in the Nike brand in the west and other parts of the world,

they are yet to be cultivated in India. Nike has to ensure that their brand is built up on these pillars in

India.

The secondary brand objective of Nike India would be to ensure that they match the market share and

sales volumes of its competitors. After all, a company is in business to make profits and stay ahead of

its competitors. A company, product or brand may have a very good reputation and image, but if it is

not profitable, it does serve its purpose. At the same time sales figures and data can be misleading.

Hence market share has also to be paid attention to.

Nike despite being one of the most popular brands in the world has not really caught on in India. Yet,

there is reason to believe that Batas Power and Liberty would be ahead of Nike in terms of popularity.

We also notice that Nike is at par with Reebok. This again does not reflect too well on the brand,

considering that Nike outsells Reebok everywhere else in the world.

Hence it is reasonable to state that Nikes popularity level in India could do with a boost. The best way


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to achieve this would be some serious brand building. The image of the brand has to be improved and

people must be made aware of its presence. Thus, the rationale behind choosing improvement of brand

image and reputation as the companys primary objective is quite clear.

Nikes distinctive competency lies in the area of marketing, particularity in the area of consumer brand

awareness and brand power. On the global scale this key distinctive competency towers over the

competitors. As a result, Nikes market share is number-one in the athletic footwear industry in mostplaces around the world. Catch phrases like, "Just Do It," and symbols like the Nike "Swoosh," couple

with sports icons to serve as instant reminders of the Nike Empire. It is about time that this competency

is leveraged on to India.

Two key attributes of a distinctive competency are its inability to be easily replicated and the value or

benefit it offers to consumers. Few companies have such a recognizable image and the resources to

promote it. This ultimately translates into added value for consumers. The public benefits from the

strength of Nikes image at the point of purchase. For decades, consumers have come to associate the

Nike image with quality products. By associating star athletes and motivational slogans like, "Just Do It,"

with marketing campaigns that emphasize fitness, competition, and sportsmanship, consumers identify

their purchases with the prospect of achieving greatness. Younger consumers especially benefit from this

positive influence. This image is something that competing companies can not easily duplicate by simply

enhancing the physical characteristics of their products.

Nikes vision is to remain the leader in the industry. The company will continue to produce the quality

products that have been provided in the past. Most importantly, Nike will continue to meet the ever-

changing needs of the customers, through product innovation. In the past, the company has utilized

product differentiation as the main competitive strategy. As Nikes reputation dictates, it will continue to

place emphasis in this area. Nike has built its business on providing products that rise above all others

and this has made it the worldwide success that it is today.

Nike is known for its technologically advanced products and is the leader in this area. This allows Nikes

products to stand out from the rest. The companys focus also allows it to maintain a somewhat narrow

niche that enables it to effectively capture the needs and wants of the consumers. An example of Nikes

superior and innovative technology is its new range of shoes called Air Presto. Termed as the first T -shirt for the feet, these shoes can take the shape and size of the wearers feet. Unlike regular shoes it

comes are sizes like XL, L, M, S and XS. Each of these sizes can accommodate three conventional foot

sizes. Nike will continue to produce such path-breaking products in the future and stay a step ahead of

its competitors.

Nike will also focus on making a strong effort in price leadership. Nikes products in the past have been

concentrated in the higher end of the pricing category. An entrance will now be made into lower price

categories with these quality products. This will enable Nike to capture an even greater hold on market

share.

Presently, the only form of customer relationship management activity that Nike has adopted in India is

product warranty. Nike shoes come with a six-month warranty. If the shoe is found to be defective or

wears out within six months due to no fault of the wearer, Nike replaces the product. This is only the

first step and more needs to be dome in this area.

Being a company that always strives towards excellence, Nike needs to know exactly what its customers

think about their products. A good way of assessing this would be to have the customer fill in a form at

the point of purchase. The form will ask the customer his / her opinion on the product as well as the

showroom. Suggestions and comments would be welcome. However, care must be taken to ensure that

these forms are not too cumbersome and do not take up too much of the customers time. Surveys have

indicated that normally people dont mind filling in forms as long as they are not too long.

Another good method would be to introduce a system of customer points. Every time a customer makes

a purchase, he would earn himself a certain number of points, depending on the price of the product.

After he crosses a certain point level, he would be entitled to a gift from the company or choose aproduct of a certain value from the range. This would be helpful in building customer loyalty and give


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them an incentive to make repeat purchases. A most valued customer database could be created from

her e and various forms of direct marketing could be directed at them. This would help the company to

retain its existing customers.

A third way to improve customer relationship would be to issue gift coupons and vouchers. People would

have the facility to buy these vouchers and present them to their dear ones. This would be a good way

to reach out towards newer customers through existing ones.

RECOMMENDATIONS

To explore the mainland market, Hong Kong companies should position themselves in areas in which

they are strong. From the viewpoint of mainland consumers, Hong Kong's leather consumer goods are

considered competitive in the high-end and mid-range. Mainland consumers are brand conscious, and it

is vital to promote own brands which have clear image.

This survey also shows that Hong Kong products are preferred for their design/style and quality. Bearing

these in mind, Hong Kong companies should never compromise on quality, and they should allocate

more resources to product design, selection of material and craftsmanship.

OTHER SUGGESTION INCLUDE

Department stores are the prime sales and marketing channel for leather consumer goods. In addition,

store decorations and product displays should be designed to create a strong first impression. Seasonal

promotion campaigns, like special discounts and advertisements, could be employed. New lines of

collections should be introduced for festivals.

In addition to promotional activities in shopping malls and department stores, discounts and TV

commercials are considered effective channels for promotion. It is advisable to pay attention to the

affordability of customers in different cities, while setting price points for different product categories.

Meanwhile, leather shoes offer better growth potential.

Popular materials used for leather consumer goods include bovine skin, goat/kid/lamb/sheep skin and

crocodile skin. Regarding colors, black is by far most sought-after with dark brown in second place.

Due to their growing spending power, the rising middle class should be the target of Hong Kong's sellers

of leather consumer goods. Hong Kong companies should put more emphasis on products for business

use. In addition, it is useful to introduce appropriate designs that cater for the tastes of the middles

class.

Double Click 2006 Consumer Email Study October 2006, the fourth of Double-Click annual consumer

email studies points to an increasing sophistication in consumer usage of email functionality and a

corresponding complexity of purchasing behavior. The Spam crisis continues to affect consumer behavior

online but does not necessarily cloud consumer receptiveness to legitimate marketers: an overwhelming

majority of online consumers receive offers by email and have made a purchase online or offline as a

result. Consumers are using available tools to limit spam and are employing operate email accounts for

purchasing, all in attempts to increase control and improve their email experience. Working with Beyond

Interactive and the NFO//net source panel of 900,000 US consumers, polled 1,000consumers via email

from July 30 - August5, 2007. All respondents recruited use email/internet 1+ times per week, which

reflects the usage of the larger online population (94% of the 18+ online population according to

Nielsen, 2006).There was an equal segmentation of men and women and the average age was 42.7.This

is the fourth of an annual series of consumer research studies and trending information was derived

using the data from previous years. The sample mirrored previous studies and is reflective of the online

population as a whole.

Key Findings The majority of consumers receive some kind of marketing email with special offers from

retailers most common Sender recognition most impacts operates, while content relevance increases

likeliness to purchase Frequency ascertain category, are very specific to the category of email but varygreatly from one consumer to the next; frequency of permission based email is clearly a great concern


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to consumers and has an impact on what they consider to be Spam. Email drives multi-channel

purchases and has an immediate as well as a latent Nearly 64% of consumers cite the line as the most

important factor in opening an email.2006 Consumer Email Study impact. It drives consumers most

often to the online channel but also results in retail and catalog sales. Consumers have become

sophisticated in their use of ISP-supplied tools to limits Pam and in their usage of various email

addresses to manage their varied email activities Home and free email addresses are most often used

for purchasing, within email address specifically designated for that usage. Men and women haveradically different ideas of what spam is and different purchasing behavior related to Spam. Women are

more receptive to promotions and discounts and correspondingly more interested in and tolerant of

marketing emails than men. Receptiveness to Marketer Emails. The vast majority (91%) of consumers

receive some form of permission-based email with 57.2% receiving special offers from online merchants,

55.4% receiving them from traditional retailers, and 48.5%receiving them from catalogers. Other

popular types of marketing emails included account statements/online bill payment information

(received by 49.8% of respondents), travel emails (43.3%), coupons for groceries (40.0%), health

(41.1%) and household tips/recipes/crafts (42.1%). Of categories in which consumers do not currently

receive e-mails, respondents are most interested in receiving grocery coupons (cited by 22.1%) and

household tips/recipes/crafts (13.6%).Other categories of strong interest were electronics and computer

software/hardware, 13.8% and apparel/shoes at12.3%. Permission-based email also continues to be the

preferred method of contact from the favorite retailer regarding new products, services or promotions

(preferred by 59% of consumers), while only 32.1% preferred direct mail. Sender Recognition, Content

Relevance Most Impacts Purchasing consideration behavior, the line continues to be the most compelling

reason to open permission-based email, cited by 63.3% of all respondents, an increase from 59.9%

in2005. This speaks to the growing significance of user recognition of sender and the power of brands

even more important in an era of spam. Of all types of subject lines, discount offers are the primary

motivational factor for opening permission based email (increased to59.5% of all respondents from

56.7% in 2007), while compelling news and information fell from 57.6% of all respondents to 48.6% in

2006.Special offers from retailers/catalogers received by at least 50% of respondents

When asked what most compelled them to take action on a permission-based email, product I needed at

the time, a reflection of the relevancy of the offer, was noted by37.8% of all respondents, outranking

the next most common choice, special offer or discount, cited by 35.0% of respondents. Likeliness to

respond could be increased if an email contains relevant information (noted by 67.3% of respondents)and contains information based on interests specified to that company. Consumers found

recommendations based on past purchasing behavior less appealing (noted by only 28.1% of all

respondents).Consumers clearly want a degree of control over what marketers send them and would like

their specified interests taken into account. Consumers are also very specific in their frequency

preferences, with news and weather most often preferred daily, special offers from retailers, online

merchants and catalogers most often preferred weekly, and account statements/bill payment

communications monthly. However, therere significant numbers of consumers who vary in these

preferences, with just over20% of those who receive special offers and discounts from retailers, online

merchants and catalogers preferring the communications to come monthly. In accordance with specified

frequency statements, when asked what concerned them about their inboxes, frequency of permission-

based email was second only to Spam, cited by 42% of respondents. This danger is even more

pronounced considering only 28% noted frequency of permission-based email as a concern in2006.

Clearly marketers need to test for optimal frequency and solicit customer preferences. Email Drives

Multi-Channel Purchases But at the Expense of Offline Retail Permission-based emails clearly drives

purchases. Sixty-seven percent of respondents received an email offer from a Consumers take action on

emails corresponding to product need Relevant content, information specified by user increases

likeliness to respond 2007 Consumer Email Study, Cataloger or online merchant that resulted in a

purchase. Top purchasing categories were: apparel/shoes at 83.4%making a purchase, computer

software/hardware at 81.4%, gifts/flower sat 77.6%, travel at 77.2%, electronics at77.1% and food at

71.7%. The only under performing category was financial products and services at 41.5%, which could

relate to the high consideration necessary for these products, the incidence of spam in this category or

lack of interest due to the economy. The channel purchased in as a result of permission-based email is

highly specific to the category of product: travel had the highest incidence of online purchase at70%

with only 13% purchasing by catalog/phone/mail, while apparel/shoes had a relatively high incidence of

online purchase, 58% with 41% purchasing via offline retail and 23% via catalog, and over the counterand prescription drugs had equal levels of online and retail purchase at 32%.Email marketing promotes


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use of the online channel. In comparing the typical channel purchase behavior of respondents in a

variety of categories to where they were most likely to purchase after receiving permission based email,

the results show that respondents are more likely than usual to use the online channel for purchasing

after receiving a permission based email; this is true in all categories except financial services. In

apparel/shoes, where 31% would typically buy online, a permission-based email resulted in an increase

of online channel usage to 58%, gifts/flowers saw online channel lift from 45%to 61%, and electronics

from 45% to 60%.For consumers who receive email offers from retailers in the apparel/shoes category,email marketing does

project on nike

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