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7/27/2019 Group 5 Nike-I
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7/27/2019 Group 5 Nike-I
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Table of contents
Executive Summary 2 History of Nike 3
Qualitative Research Model Laddering 6
Research Methodology 9
Quantitative Research Model BAV 10
Questionnaire 11
Analysis 15
Findings and Conclusions 19
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Executive Summary
Nike, Inc. is an American multinational manufacturing company. Their core products include
footwear and athletic apparel. The company was founded on January 25, 1964 as Blue
Ribbon Sports by Bill Bowerman and Phil Knight. Nike stands as the world leader in athleticshoes.
The company rose quickly from small-time sales at track meets, to a major publicly-traded
Fortune 500 company. The company went public in the 1980's and Nike successfully profited
50% of the market share in the United States. Throughout its history and background, Nike
has utilized strong advertising campaigns to separate itself from its competition. Two of the
most memorable marketing campaigns, "Just Do It" and the Air Jordan brand, cemented
Nike as one of the most popular shoe brands in the world.
Today, Nike is one of the biggest transnational co-operations in the world. They have a widevariety of products to sell which they make in factories all over the world. Nike's first
products were track running shoes. They now make shoes, jerseys, shorts and get
equipment for a wide range of sports including track & field, tennis, baseball, football, ice
hockey, basketball and cricket, running, golf, cross training, cycling, volleyball, wrestling,
cheerleading, aquatic activities etc.
In the first phase of the project, we attempt to develop a Quantitative Research Model to
test the current status of the brand Nike using the Brand Asset Valuator Model developed
by Young & Rubicam while the Laddering Method was employed to determine the brandidentity.
The BAV model measures the brand along 4 dimensions namely Differentiation, Relevance,
Esteem and Knowledge. Differentiation and Relevance together comprise the Brand Strength
while Esteem and Knowledge build up the Brand Stature. For the BAV analysis, a simple
sample of 29 was surveyed using a questionnaire.
On the BAV grid, Nike lies on the leadership category which shows that it has high earnings
and high growth potential but the only cause of concern if any, is the comparatively low
differentiation score which shows that Nikes servings are replicated by its competitors too.
The laddering method was used as a Qualitative research tool to gauge the brand identity of
Nike. A sample of 7 respondents was chosen for this process. The laddering technique
provides a systematic way of understanding an individuals core set of values and how
powerful Nikes product offerings relate to these constructs. This technique identified that
Nike as a brand for the sporting aficionado that promises satisfaction, comfort, self-
esteem and provides value for money. Watch the ensured performance and pride
delivered as Nike just does it!
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History of Nike
Nike, as the world knows it now, was originally founded as Blue Ribbon Sports (BRS) by
University of Oregon track athlete Philip Knight and his coach Bill Bowerman in January
1964. The company in its initial days, operated as a distributor for Japanese shoe maker
Onitsuka (now ASICS).
In 1966, BRS opened its first retail store and in 1971, BRS launched its own line of footwear
which bore the Swoosh which was newly designed by Carolyn Davidson. The company
officially changed its name to Nike on May 30th
1978.
The first brand ad for Nike, called "There is no finish line," in which no Nike product was
shown came in 1977. The onset of the year 1980 saw Nike take a 50% market share in the
U.S. athletic shoe market, and the company went public in December of that year.
It was Wieden+Kennedy ad agency co-founder Dan Wieden who coined the now-famous
slogan Justdo it for a 1988 Nike ad campaign. This ad was chosen by Advertising Age as
one of the top five ad slogans of the 20th century. Nikes product line was rapidly expanding
to encompass many sports and regions across the globe in 80s.
Products
Nike produces a host of sports equipment and apparel. Their first product was track running
shoes. They currently make shoes, jerseys, shorts etc. for a wide range of sports, including
track and field, baseball, tennis, soccer, basketball, and cricket.
Nike is well known and popular in youth culture, and hip hop culture for their supplying
of urban fashion clothing. Nike recently teamed up with Apple to produce the Nike+, a
product that monitors a runner's performance via a radio device in the shoe that links to
the iPod Nano.
Nike is known for disruptive innovation and is currently the world no. 1 in sports goods.
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Evolution over time
Nike's Corporate Mission Statement:
'To be the world's leading sports and Fitness Company.'
Key Dates:
1962: Philip H. Knight founds Blue Ribbon Sports (BRS) to import Japanese running shoes.
1963: BRS takes its first delivery of 200 shoes from Onitsuka Tiger Co.
1964: BRS becomes partnership between Knight and William Bowerman.
1966: The Companys first retail outlet opens.
1968: Company is incorporated; the Bowerman-designed Cortez shoe becomes a big seller.
1971: BRS begins manufacturing its own products overseas, through subcontractors; the
Swoosh trademark and the Nike brand are introduced.
1972: At the 1972 U.S. Olympic Trials, the Nike brand is promoted for the first time;
company enters its first foreign market, Canada.
1978: Company changes its name to Nike, Inc.
1979: First line of clothing is launched and the Nike Air shoe cushioning device debuts.
1980: Nike goes public.
1981: Nike International, Ltd. is created to spearhead overseas push.
1985: Company signs Michael Jordan to endorse a version of its Air shoe--the 'Air Jordan.'
1988: Cole Haan, maker of casual and dress shoes, is acquired; 'Just Do It' slogan debuts.
1990: First Nike Town retail outlet opens in Portland, Oregon.
1991: Revenues reach $3 billion.
1994: Company acquires Canstar Sports Inc., the leading maker of skates and hockey
equipment in the world, later renamed Bauer Nike Hockey Inc.
1995: Company signs golfer Tiger Woods to a 20-year, $40 million endorsement deal.
1996: The Nike equipment division is created.
1999: Company begins selling its products directly to consumers via its web site.
2000:Present: Secret Tournament incorporated advertising, the Internet, public relations,
retail and consumer events which become the cornerstone for Nike marketing and
communications.
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2012:Nike expands in new ways, including strong growth in China and a deal to become the
official sponsor of the National Football League (NFL)
2013: Nike, Inc. announced an increase to its fiscal 2015 revenue target to a new range of
$28-30 billion, up from its previous target of $27 billion announced in May 2010. The
company also increased its fiscal 2015 revenue target for the NIKE Brand to $24-25 billion,
up from its previous target of $23 billion.
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Qualitative Method
Reynolds and Gutmans Laddering Method
Thomas J Reynolds and Jonathan Gutman developed and introduced laddering in 1988,
based on Gutmans Means-End Theory of 1982. They described product attributes,
consequences, and values. Product attributes produce consequences that produce personal
meaning for product users.
We mean to say is that the product functional and emotional benefits, which are personal to
the product users. Study also shows that people buy features and benefits only when their
emotions and beliefs are satisfied.
There are four levels to the features-benefits-emotions chain. These are as follows:
1. Features2. Functional benefits3. Higher Order benefits4. Emotional benefits
Each one these levels are linked to each other. All the levels are important in understanding
why people buy a product or a service.
The feature is specific, it helps performs a specific job.
The functional benefit is tangible and it is the outcome of the features.
The higher order benefits are what the functional benefit delivers.
The emotional benefit satisfies feelings and beliefs. We have learnt that emotions drive
wants or needs.
The process of laddering
The process of laddering is all about asking questions to individuals. We start with asking our
respondents about the feature of the product. When you get an answer you further ask
them about the functional benefits next you ask them about higher order benefits of thefunctional benefits. By this way the why questions go ahead.
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We should make sure not to ask a why directly but to ask the questions in a roundabout
manner.
Laddering works well with using depth interviews. It helps in getting in depth and privacy.
We have also used laddering for our brand Nike. We have done laddering on 7 people.
Laddering findings and suggestions
Some of respondents weremotivated by the tag line of Nike
which is Just do it. The brand
ambassador and also the wide
acceptance it has give them a good
feeling which also boosts their self-
esteem.
The respondents showed the
quality factor in the shoes gave
their feet comfort and helped
them achieve personal
attainment.
The value for money proposition
which they gain by using the shoe
makes them feel happy.
The design, innovative styles of the
shoe and also the latest trends
gives them a boost to their physical
appearance as well as their self
esteem
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The main factors that boost its consumption are its innovative styles, its new designs,
the comfort it gives, the value for money which the consumers get, the catchy tag line
which gives them an adrenaline rush help them in boosting their self-esteem as well as
physical attainment
Strong Benefit Chain: Most of the respondents prefer this
because of the comfort factor they attain from the shoe and
also the value for money. This should be cashed upon.
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Research Methodology
The Brand Asset Valuator model was used to measure the current status of thebrand with reference to its competitors.
An independent questionnaire was designed to understand the customersperception across the 4 pillars namely Differentiation, Relevance, Knowledge and
Esteem, on which the BAV is based.
Weightage of 100% was assigned to each pillar of the BAV model. This weightage was split amongst the questions related to them. Weights are assigned to these questions on the basis of its
significance and its importance to the 4 pillars.
Research Design: A descriptive research was conducted. Research Instrument: Questionnaire Sampling Unit: Users of Different brands of shoes and other sports apparel. Sample Size: 29 Brands used: Nike, Adidas, Reebok, Puma and Asics Calculation:
The calculation was done by adding the number of responses andmultiplying them to the weightage of the question that was allocated
to a particular attribute or a brand.
The process was followed to arrive at a score for each brand. All thescores from the questions pertaining to a specific pillar for a particular
brand were added to get the final score.
Percentage was assigned on the basis of the final score received byeach of the brands.
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Quantitative Method
Young and Rubicams Brand Asset Valuator
The brand image of Nike rests upon the 4 pillars that essentially constitute Young
and Rubicams Brand Asset Valuator. The factors that make up this technique are
Differentiation, Relevance, Esteem and Knowledge.
Differentiation: Is the points of difference associated with a brand with respect to another
brand. Differentiation has 3 components: Different, Unique and Distinctive. Being different
is the ability to stand out from the competition a brand has. Uniqueness is the brands
essence, beliefs and personality. Distinctiveness helps a brand to climb up the premiumpedestal.
Relevance: Is the factor that makes or breaks the attraction of a customer towards a brand.
It is the stepping stone towards the brands progression.
Esteem: Is regardedas the extent of a brand being considered as likeable and how it caters
to the promised values to its customers. Esteem depends on perceptions of quality and
popularity.
Relevance and differentiation make up the brand strength.
Knowledge: Means how the consumer knows what the brand is and what the brand stands
for.
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Questionnaire
1) Age1) < 20 2) 20-29 3) 30-39 4) 40-49 5) >50
2) Gender M/F3) Which brands come to your mind when you think of sportswear? (Brand knowledge)
-------------------------
4) When it comes to sports apparel which one of these brands will you recommend? (BrandRelevance)
1. Puma 2.Nike 3.Reebok 4. Adidas 5. Asics
5) Please rate the following brands.1=Strongly Agree 2=Agree 3=Neither Agree/nor disagree 4=Disagree
5=Strongly Disagree
A. I think understated brand is a trustworthy brand. (Brand esteem)Strongly
Agree
Agree Neither
agree nor
disagree
Disagree Strongly
agree
PumaNike
Reebok
Adidas
Asics
B. The quality of the understated brand is the best. (Brand esteem)Strongly
Agree
Agree Neither
agree nordisagree
Disagree Strongly
agree
Puma
Nike
Reebok
Adidas
Asics
C. I think understated brand has a unique personality. (Brand differentiation)Strongly Agree Neither Disagree Strongly
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Agree agree nor
disagree
agree
Puma
Nike
Reebok
Adidas
Asics
6) The following factors are important to you while buying sports apparel. Please rank themaccording to their importance with rank 1 being highest important and rank 5 being least
important. (Brand Relevance)
1. Comfort 2.Trendiness 3. Price 4. Design 5. Durability
7) Please rate the following brands.1=Strongly Agree 2=Agree 3=neither Agree/nor disagree 4=Disagree
5=Strongly Disagree
A. I think the understated brand is comfortable.Strongly
agree
Agree Neither
agree nor
disagree
Disagree Strongly
agree
Puma
NikeReebok
Adidas
Asics
B. I think the understated brand is Trendy.Strongly
Agree
Agree Neither
agree nor
disagree
Disagree Strongly
agree
Puma
Nike
Reebok
Adidas
Asics
C. I think the understated brand is correctly priced.Strongly
Agree
Agree Neither
agree nor
Disagree Strongly
agree
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disagree
Puma
Nike
Reebok
Adidas
Asics
D. I think the understated brand has good Design.Strongly
Agree
Agree Neither
agree nor
disagree
Disagree Strongly
agree
Puma
Nike
ReebokAdidas
Asics
I think the understated brand is Durable.
Strongly
Agree
Agree Neither
agree nor
disagree
Disagree Strongly
agree
PumaNike
Reebok
Adidas
Asics
8) Please rate the following brands.1=Strongly Agree 2=Agree 3=Neither Agree/nor disagree
4=Disagree 5=Strongly Disagree
A. I think the understated brand conveys a powerful meaning. (Brand differentiation)Strongly
Agree
Agree Neither
agree nor
disagree
Disagree Strongly
agree
Puma
Nike
Reebok
Adidas
Asics
B. I think the understated brand is popular. (Brand esteem)
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Strongly
Agree
Agree Neither
agree nor
disagree
Disagree Strongly
agree
Puma
Nike
Reebok
Adidas
Asics
9) Given the list of traits : Individuality, spontaneity, victory, taking up challenges andperformance. Which brand would you associate with which trait? (Brand knowledge)
1. Puma ------------------
2. Nike ------------------
3. Reebok ------------------
4. Adidas ------------------
5. Asics ------------------
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Analysis
For the brand Puma, we find that the Differentiation is marginally lesser thanRelevance i.e. DK .This
is a healthy pattern as the customers will start to learn more about the brand.
This is because they will have more motivation to find out the brand they are using.
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Puma Adidas Asics Reebok Nike
Esteem
Relevance
Differentiation
Knowledge
21% 21.50% 21%16.67%
0%5%
10%15%20%25%
Puma
Puma
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D>R implies that consumers perceive the brand to have a unique meaning but withroom for more relevance in their lives.
E>K implies that Reebok is better liked than known. So consumers will have moremotivation to find out about the brand.
Reebok is very low on knowledge and esteem. Comparatively, it has higher relevanceand differentiation.
Reebok has greater brand strength than brand stature. Brand Strength allows thebrand to both defend itself from competition and generate margin, earnings and
economic value.
Nike, as a brand is the market leader. For Nike, differentiation is lesser than relevance which means that Nike has lost its
uniqueness.
This is due to the fact that market competition is fierce and the presence of largenumber of players. Nike follows competitive pricing; hence people have an incentive
to buy.
18% 18.80%19%
12.37%
0%
5%
10%
15%
20%
Esteem Relevance Differentiation Knowledge
Reebok
Reebok
24% 23.76% 23%
43.01%
0%
10%
20%
30%
40%
50%
Esteem Relevance Differentiation Knowledge
Nike
Nike
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Nike is better known than liked which can be inferred from the point of esteembeing lesser than knowledge.
Adidas has successfully built on Esteem and Differentiation. The brand's highest pillar is Esteem which shows that itfulfilsitsimplied or overtly
stated consumer promise and is a highly regarded and respected brand. E>K
The brand is well distinguished from others but consumers have not understood andinternalized what the brand stands for. i.e. D>R
Analysing the Relevance and Differentiation for the brand ASICS we find that there ishardly any difference among the two.
But, the Relevance parameter is slightly better than the differentiation parameteri.e. R>D. This brand is somewhat similar to that of Reebok.
There is not much uniqueness in the Brand and Price plays an important role in thepurchase decision. However the brand has some room for growth.
0%
5%
10%
15%
20%
25%
Esteem Relevance Differentiation Knowledge
Adidas
Adidas
14% 15.04% 15%
9.14%
0%
5%
10%
15%
20%
Esteem Relevance Differentiation Knowledge
Asics
Asics
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Similarly now comparing the Esteem and Knowledge parameters for the brandPUMA we find that the Esteem Parameter is much better than the Knowledge
Parameter i.e. E>K.
This shows that there is a lot of scope for the customers to learn about the brandthey are using and have more drive to find out the brand they are using.
B
RA
N
D
S
T
R
E
N
GT
H
B R A N D S T A T U R E
Leadership
New
Niche
Declining
Eroding
Unfocused
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Findings and Conclusions
From our analysis we can conclude the following:
Brand Knowledge In terms of brand knowledge, Nike has the highest among all brands
with about 43.01%. Hence, the users of sportswear have very good knowledge about Nike.
Brand Esteem Nike has an esteem value of about 24%. This is the highest among all
brands evaluated. So it is a highly regarded and well respected brand.
Brand RelevanceNikes brand relevance is 23.76% which indicates a greater relevance
compared with other brands. Relevance is the most important building block for any brand
and Nike has the highest relevance so the brand is in a very safe position in the market.
Brand DifferentiationNike has the highest differentiation among other brands which
proves that it is able to differentiate itself from other brands.
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