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    complete project report on nike shoes -August 29th, 2008

    A SUMMER TRAINING REPORT

    ON

    MARKETING STRATEGY OF NIKE

    ATNIKESHOES INDUSTRIES LIMITED

    SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF BACHELOR OF BUSINESS

    ADMINISTRATION (BBA)

    TRAINING SUPERVISOR SUBMITTED BY

    SESSION 2005-2008

    ACKNOWLEDGEMENT

    The present work is an effort to throw some light on Marketing Strategy of Nike at Nike IndustriesLimited. The work would not have been possible to come to the present shape without the ableguidance, supervision and help to me by number of people.

    With deep sense of gratitude I acknowledge the encouragement and guidance received by myorganizational guide ..and other staff members.

    I convey my heartful affection to all those people who helped and supported me during the course, forcompletion of my Project Report.

    ..

    EXECUTIVE SUMMARYThis marketing strategic plan has been written keeping in mind the Indian operations of Nike Inc. theglobal sports shoe giant. It aims first, at analyzing the sports shoe industry India and finding a place in itfor Nike. It then sets out to describe the target audience for the product range and finally suggests ahost 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 qualitysports 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 eventuallytargeted are described and compared with competitors customer targets. After starting the objectivesand reasoning behind them, the actual marketing programs are described in detail. This includes aspectssuch as pricing, advertising, promotion, sales, channels, and the company website. Suggestions aremade 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 whilesegmenting 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

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    1) INTRODUCTION 1-13

    a) Background of the problem 1b) About The Nike Industry 3c) Nike Maxsight 4d) Industry Overview 5

    e) Product Trend 8

    2) RESEARCH METHODOLOGY 14-20a) Research objectives 14b) Research design 15c) Data sources 15i) Primary data 15ii) Secondary data 15

    d) Questionnaire design formulation 16e) Sample design 17f) Limitations of the research 20

    3) COMPANY PROFILE 21-43a) Nike Industries Ltd. A company profile 21b) Recent Development 21

    c) Future Plan 23d) Risk and Concern 28e) Literature Review 31

    f) 4ps of Nike 40g) SWOT Analysis 41

    4) DATA ANALYSIS 44-63

    5) CONCLUSION & FINDINGS 64-67

    6) RECOMMENDATIONS 68-75

    a) OTHER SUGGESTION INCLUDE 69

    7) ANNEXURE 76-82

    8) BIBLIOGRAPHY 83

    INTRODUCTION

    BACKGROUND OF THE PROBLEMSince the late 1980s, Business School marketing professor Itamar Simonson has looked for ways tounderstand 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. Customersmay not know what they want, and second-guessing them can be expensive, says the professor whoteaches MBA and PhD marketing and consumer decision-making courses. In Simonsons words, Thebenefits 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 tovarious influences, and in many cases, customers have poor insight into their preferences. In one of hisrecent 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 themexactly 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 character runsthrough a shopping mall past talking billboards that recognize him by name and urge him to buyproducts he had earlier expressed an interest in such as jeans and Ray-Bans, the ultimate inpersonalized advertising. But Simonson has this to say: The fact that consumer preferences are oftenfuzzy, unstable, and manipulatable is unlikely to change. So, the effectiveness of methods to givecustomers exactly what they (say they) want has been grossly exaggerated. His take on the l ong-heldassumption that individual marketing will supplant targeted marketing is not so fast. In studies, he haslearned 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 favorablethan those directed at larger market segments.

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    Its all psychology. Consumers with well-defined preferences may be skeptical that a marketer couldmatch expectations. Those who dont know what they want may not ever see the fit with what the sellerwants them to buy. So, individualized offers depend on customers preferences &; how the offer wasextended &; and on trust. Effective individual marketing requires not only an understanding ofindividual preferences and matching offers to those preferences, but also a thorough familiarity with thevarious factors that impact customers responses, Simonson writes. This is a tall order, one that somecompanies 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-madeparts 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 eachcustomer to design one-of-a-kind shoes. Custom Foot didnt take into account that some customerswere 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 customerpreferences 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 toladies segment.

    ABOUT THE NIKE INDUSTRY

    In sport, visual acuity and protection can mean the difference between winning and losing. Lightconditions have a dramatic effect on how the human eye perceives and, subsequently how the bodyreacts and performs -- in the sun glinting over the upper deck, shallow contrast on a putting green, orquickly adjusting from shadows to light on a tennis court or mountain bike single track.Nike knows that in athletic competition, even small advantages are critical to performance. Nike has

    spent the last eight years exploring the human eye to understand the science of vision in thedevelopment of the new Nike MaxSight Sport-Tint Contact Lens, available August 2005.

    WHAT IT ISNike MaxSight, developed in partnership with Bausch & Lomb, is a tinted soft contact lens that behaves

    like sunglasses, reducing glare and filtering out 95% of UVA and UVB and more than 90% of blue light.

    But because the lens rests directly on the eye, theres virtually no distortion as with standardsunglasses. Athletes get the same clear view at all angles.

    Plus, Nike MaxSight eliminates the environmental effects that plague sunglasses like fogging, scratching,additional weight, or nosepieces and frames to obstruct vision. Theres no obstruction from the edge ofthe lens, the frame or the nosepiece, because they dont exist. And there are no pressure points and noslippage. Max Sight also eliminates light leakage, reducing the need to squint, allowing the eye to relaxand perform more naturally.

    Nike MaxSight is, in effect, one giant visual sweet spot.

    Nike Maxsight

    HOW THEY WORKNikes patented Nike MaxSight Light Architecture selectively alters specificwavelengths of light withinthe visual spectrum to enhance key elements in sport. The athlete gets crisp, clear vision withoutanything getting in their way. By removing most of the blue light, contrast and clarity are enhanced adecided advantage for any competitor. For sports not conducive to eyewear, such as golf, tennis andsoccer, athletes will see marked improvement, even on days where the suns not at its brightest.

    Nike MaxSight provides through-and-through tinting (unlike cosmetically tinted lenses), so theres nobending or scattering of light. Plus theres limited incidental light or peripheral flickering creeping around

    the sides, as with sunglasses. Athletes tested in Nike MaxSight lenses found they squinted less, wereable to relax more, and had exceptional views of contours and movement.

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    Marco Materazzi of Italys Inter Milan football club and Baltimore Orioles second baseman Brian Robertsare among the pro athletes wearing Nike MaxSight. It has been a lot of fun to start the season thishot, said Roberts early in the MLB season. In fact, he became one of the first true fans of Nike MaxSightafter impressive initial results. During a spring daytime game, Roberts said, I wore the lenses and went2 for 4. They are so awesome.With Nike MaxSight, theres minimal squinting in bright light, and quicker visual definition when goingfrom bright light to shadows.

    Wearers will also discover a game-day benefit the look. It makes the eye look distinct, the large-pupileffect, says Alan Reichow, Nike Vision Consultant. It looks competitive.

    ROLL OVER PHOTOS FOR A MAXSIGHT LENSE SIMULATION

    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, therebymaking 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 thembefore his players. Hed never worn contacts, says Dr. Reichow. He took two pitches and turnedaround and said, Ive never seen a ball that distinct and clear. Put them on anybody who wants them.

    INDUSTRY OVERVIEWBill 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 understoodlexicon 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 offeringempowering 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 greatbenefit 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 theworld'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 ourhorizons to every corner of the world. Nike employs around 23,000 people, and every one of them issignificant 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 equipmentand 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 Purcellfootwear.

    Exeter Brands Group: In August 2004, Nike created the Exeter Brands Group, a wholly ownedsubsidiary, dedicated to building athletic footwear and apparel brands for the value retail channel. Thisportfolio 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 ofthe 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.

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    As small as we feel, the Nike family is a fairly vast enterprise. We operate on six continents. Our

    suppliers, shippers, retailers and service providers employ close to 1 million people. The diversityinherent in such size is helping Nike evolve its role as a global company. We see a bigger picture todaythan when we started, one that includes building sustainable business with sound labor practices. Weretain 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 TRENDBovine 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 theBiggest Spending Power Male professionals, managers and executives are the segment with the biggestspending 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 retailersconsider 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 asthe major reasons behind the attractiveness of Hong Kong brands in the high-end and mid-rangesegments respectively.

    PRODUCT PROFILE

    Apart from delivering a pair of comfortable sports shoes Nike also provides a number of value-addedfeatures 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 regularfeature in most of its models. Many models feature an air pocket in the shoe that reduces the weight ofthe shoe and reduces pressure on the heels. Besides the overall design and compactness of the shoeshave 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 feetwhile 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 drawthe example of the authors of this marketing plan. All of us own a pair of Nikes and have been wearingthem for well over two years a symbol of the durability of Nike shoes.

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    Style: Nikes designs are considered to be the most stylish in the industry and beat all others as far aslooks are concerned. Attractively packaged, it is a delight to bring a pair home. Add to this the Swooshthe 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 manufacturingdefects. 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 Nike6.0 and Nike SB shoes, designed for skateboarding. Nike has recently introduced cricket shoes, calledAir 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 premiumperformance 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 lastcarefully 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 aproblem is Research.

    RESEARCH OBJECTIVESTo 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:Working of Insurance PlansSWOT analysis of the product sold

    Comparative study with the competitors

    RESEARCH DESIGN

    TYPE OF RESEARCH: -Descriptive researchDescriptive 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

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    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 Internetsearch.

    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 throughquestionnaire.

    SECONDARY DATAFor 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 INSTRUMENTSSelected 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 objectivetype 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 theiranswers. 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 QUESTIONSWhich has only two answers Yes or No?

    MULTIPLE CHOICE QUESTIONSWhere respondent is offered more than two choices.

    IMPORTANCE SCALE

    A scale that rates the importance of some attribute.

    RATING SCALEA 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 be

    sampled.

    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: -

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    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 differentprofession

    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 ofTechnology, (IIT) Delhi, (c) Council of scientific and industrial Research (CSIR) (d) PHD chamber ofcommerce, 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 theinterview. Generally editing is required for open type of questions. Brief notes or symbols are frequentlyused during the interview to initially record the interviewers response since it was not desirable tointerrupt the flow with lengthy note taking. Then immediately after the interview, brief notes arerespondent. The responses are thoroughly checked in home for incorrect, inconsequential orcontradictions categories are developed only often the replies has been reviewed. This review provided afeel 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 thegathered data. Interpretation changes the new information immerging from the analysis into informationthat is pertinent or relevant to the study.

    CONCLUSION WAS DRAWN BASED ON THE SURVEY FINDINGSFinally recommendation was made to improve the sales strategy of Nike shoes to increase the salesvolume in ladies segment.

    SAMPLE DESIGN

    THE BASIS OF SAMPLING: -

    Consumers of Nike shoes are chosen randomly, so that unbiased, representative sample may beobtained.

    LIMITATIONS OF RESEARCH

    The geographical area was very much limited to residential area & so the results are not particularlyreflection 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 thegathered data. Interpretation changes the new information immerging from the analysis into informationthat 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 quantifythe results large enough so as to deduce any relevant outcomes.

    COMPANY PROFILE

    NIKE INDUSTRIES LTD. A COMPANY PROFILENike 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

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    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 distributionnetwork of over 1,500 retail stores and 27 wholesale depots provide excellent access to consumers andwholesale 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 DEVELOPMENTSNike India has said that its Faridabad and Mokamehghat units are being taken over by Fashion ShoePrivate Ltd and BDCL Enterprises Pvt Ltd, respectively. The company is also enabling the buy backprovision 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 befixed 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 sluggishmarket 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 relationproblems and non-compliance with the tripartite settlement has been withdrawn. The footwearmanufactured in this factory, which was shifted to the companys other factories and associatedmanufacturers, will now be gradually produced within the factory. The commencement of productionfrom this factory will help in re-cooping the minimal loss being suffered by the company from thislockout.

    In Simonsons words, The benefits and costs of fitting individual customer preference are more complexand 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 masscustomization. Supporters of these marketing approaches have suggested that learning what customerswant 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, andmanipulatable is unlikely to change. So, the effectiveness of methods to give customers exactly whatthey (say they) want has been grossly exaggerated. His take on the long -held assumption thatindividual 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 isfar from certain that the response to such offers will consistently be more favorable than those directedat larger market segments.

    Its all psychology. Consumers with well-defined preferences may be skeptical that a marketer couldmatch expectations. Those who dont know what they want may not ever see the fit with what the sellerwants them to buy. So, individualized offers depend on customers preferences &; how the offer wasextended &; and on trust. Effective individual marketing requires not only an understanding ofindividual 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 somecompanies have been able to fill, at least to some extent. For example, Amazon keeps track ofcustomers purchases and suggests other books they might like. Dell builds computers from mass-madeparts 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 eachcustomer to design one-of-a-kind shoes. Custom Foot didnt take into account that some customerswere 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 customerpreferences is not enough. It is required to understand other aspects of customer behavior. Kipping thisin mind, present study will find out and analyze consumer behavior of Nike shoes with reference toladies segment.

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

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    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 companysaggressive focus on retailing and revamping of business (a division into shoes and apparels) is alsohelping 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 8.51crore) on a 9.2% increase in net profit to Rs 154.27 crore (Rs 141.26 crore). Despite reducing its lossesfor the quarter, Nike India has, over the last few quarters, been continuously recording weakperformances 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 intothe companys market share.The company is finding it difficult to maintain its market share in a highly price-sensitive Indian market,despite having strong brand recall.

    97% of the companys revenues are from the domestic market while the remainder is from exports. NikeIndia is the biggest player in the Indian shoe market.

    Nike Indiasmajor problems include its high cost of production and low emphasis on marketing. Thecompany 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 localbrands.

    Nike India has a large marketing network with over 1,500 showrooms, 27 wholesale depots and eightretail 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 hasnot been able to improve sales consistently. The recent rise in sales during the third quarter endedSeptember 2006 can be attributed to the festive season. Recently, it also entered into a retailing tie-upfor Lee Cooper shoes.

    Nike India has also been trying to focus on aggressive marketing of its product. The company has beengoing through a period of transition for the past one year. With the expansion of the retail industry inNew Delhi and Mumbai, the company has recently decided to shift its marketing operations to Delhi inorder 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. Thecompany has put a fresh focus to its retail business. The company has decided to cleanse its wholesaleoperation by building relationships with credit-worthy buyers.

    It is to the companys credit that it has lately overhauled its marketing se t-up into a four-tier retailstructure 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 basicand mid-range footwear. At the bottom will be bazaar stores that will basically aim at driving volumesales at lower price points.

    The management of Nike India is taking major steps in terms of improving market penetration, focus onstores 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 fromChina. This may significantly affect Nike Indias prospects unless it manages to wean away customerswith 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

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    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 torestructure 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

    tackle dwindling sales. Each of these managers assisted by a dedicated team would be like a brandchampion 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 festivalseason 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% incanvas shoes.

    The footwear industry in India is highly fragmented and dominated by the unorganized sector. Theindustry 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 footwearsales 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 :57Plastic 21: 9

    GROWTH DRIVERSThe 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 BRANDSNike owns brands like Hush Puppies, Signor, Marie Claire Power, Sandak, Hawai, Naughty boy andAmbassador. 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 increasingfocus on rural thrust for volume growth in the low-priced footwear segment.

    RISK AND CONCERNLifting 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 onnumerous 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 thepremium 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 increasedby 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 commencedoperations despite lifting up of the lock out since July 3, 2007.

    VALUATIONBILs long-term success is dependent on the how labour issue is tackled and the flexibility, which it canadopt to meet threat of imports and competition from local footwear companies. Long term investorswith 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.

    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

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    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 Rs30.2 mn as against a profit of Rs 39.6 mn in the corresponding period of the previous year. The loss isdue 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 meetthreat 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) Q1200103Q1200003Sales 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 6.9NPM(%) 4.16 3.42 2.62 2.5ROE(%) 8.95 7.44 5.31

    Nike understated 9 month losses -Brief Financials (in Rs. Mn.)Detailed QuarterlyPeriod ending (months)30-Sep-2007 (9)31-Dec-2006(12)31-Dec-2006 (12)Net sales 4980.206461.177172.91

    Other Income42.1063.6165.21

    Total Income5022.306524.777238.12Cost of goods sold4974.706471.797051.76OPBDIT47.6052.98186.36PAT-117.20-74.1039.80Gross Block-2191.072062.26

    Equity capital-514.22514.22EPS (Rs.)--1.440.77DPS (Rs.)-0.000.75BV (Rs.)-37.2738.71P/E range (x)-0.0 - 0.00.0 - 0.0

    Debt / Equity (x)-0.320.26

    Operating margin (% of OI) 0.90.82.6Net margin (% of OI)-2.3-1.10.5As on 30 June 2007, the public, institutions and foreign bodies held31.23%, 13.91% and 0.16% stake in the company, respectively

    LITERATURE REVIEWThe 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 andHirschman, 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;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 pleasantaspects of consumption were then tackled from an experiential point of view. The Experiential View is aphenomenological perspective that perceives consumption as a primary state of consciousness having avariety 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 marketingmix (price, distribution), perceived risk and conflicts, but mostly the social influence of the consumersreference groups (Holbrook and Hirschman, 1982; Business Central Europe, 1994) which is the aim of

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    the Symbolic Interactionism Perspective. Acquisition, possession and consumption are activities takingplace 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 consumingthem. The Symbolic Interactionism Perspective deals with the relationship between consumers and theproducts they consume, and suggests that a significant proportion of consumption behaviors consist ofsocial 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 builtthrough interactions with others, consumption is not only an individual activity, but also a social processof goods definition (Gallant and Kleinman, 1983). Since individuals are often motivated to acquireproducts according to what they mean to them and to members of their social reference groups (Leighand Gabel, 1992), their behavior is subject to the pressures of cultural norms and the expectations ofsocialization institutions rules such as those coming from family and other reference groups (Faber,OGuinn and McCarthy, 1987; Engel, Blackwell and Miniard, 1993). Thus, Symbolic InteractionismPerspective considers the human spirit as fundamentally social, and dependent on shared symbols. Thesymbols being generated at a global level (Geertz, 1973; Solomon, 1983; McCracken, 1986, 1988; Leighand Gabel, 1992), the Symbolic Interactionism Perspective accepts as precept the fact that society andits 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 an

    operational level, image variables may be regarded as the intangible attributes of the product that carrycultural and social meanings. According to Erickson, Johansson and Chao (1984), an image variable isdefined as some aspect of the product that is distinct from its physical characteristics but that isnevertheless identified with the product. The image variables emerge from four cognitiverepresentations individuals have of their environment: the symbolism of advertising, the celebrityendorsement, 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 rhetoricthat influences consumers preconceptions towards the products of a country. Its meaning can beconceived as an indication serving as a basis of evaluation (Bilkey and Nes, 1982), when one considers aproduct as a bundle of information. Consequently, according to Kaynak and Cavusgil (1983), the imagesof 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 oneconcerns the appreciation or not of those characteristics, and the third one corresponds to the actionsabout the country that the consumer feels are appropriate. A tendency to evaluate positively the localproduction compared to imported production, and biases in favor of industrialized countries have beenfound 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 foreignmarkets, sellers often face quotas, tariffs, and non-tariff barriers. In addition, they may face anintangible 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 ofinvolvement of the consumer in purchasing the product and the presence of other cues such as brand

    name, guarantee and price (Ahmed and dAstous, 1993). In a recently published meta-analysis ofcountry-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 alesser 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 ColumbiaUniversity, 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 dininglocations and given a card that would track their purchases. They were randomly assigned to one of twogroups those in the "low" requirement group were told they would have to purchase 12 sandwiches toget two free movie tickets, whereas those in the "high" requirement group were told they would have topurchase 12 sandwiches and 12 orders of sushi to get two free movie tickets. So, the second group hadto 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 morelikely 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 tofit them better than other consumers, for example, a program that requires sushi-lovers to eat sushithat fit completely colors their assessment of how attractive the offer is," Simonson says. "As a result,

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    by creating what appears like personal fit, marketers can attract consumers to frequency programs andmany other promotional offers." Kivetz and Simonson replicated these findings regarding influences on

    participation in frequency, or loyalty, programs in studies with travelers interviewed at domesticairports.The sushi study is among a number of studies Simonson has been conducting since the late1980s about how consumers make choices. Much of his work debunks the accepted theory that givingconsumers 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 customerpreference are more complex and less deterministic than has been assumed." That's because, Simonsonsays, "customer preferences are often ill-defined and susceptible to various influences, and in manycases, 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 andgiving them exactly what they want will create customer loyalty and an insurmountable barrier tocompetition. In an example taken to the extreme in the 2007 movie Minority Report, Tom Cruise'scharacter 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 inpersonalized 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." That's becauseconsumers 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 isfar from certain that the response to such offers will consistently be more favorable than those directedat 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 wasextended & and on trust. "Effective individual marketing requires not only an understanding of individualpreferences and matching offers to those preferences, but also a thorough familiarity with the variousfactors 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 companiescan take the concept too far, like the Custom Foot chain of shoe stores that took detailed measurementsand 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 productwhen they shop for it online. Many companies are looking at online customization as the future of onlinebusiness 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 customizeseveral products - pizza, shoes, and electronic devices.

    Crow said that her study posed two questions for respondents: first, how difficult is it to customize aproduct, 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, shesaid. 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 withattributes to choose from," she explained. Consumers could click on a drop-down box to customize aproduct they would want to purchase, she said. She found that more people relied on the default choices

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    rather than selecting other choices that were offered. She said, some research suggests that manypeople 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 thefuture, 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 onlineenvironment, in future projects she plans to analyze other demographic groups. Customization will be akey 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 intapping 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 goodunderstanding 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. Thestudy 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

    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 andstore 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 (1stOctober), 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 andsales activities, followed by discount/price reduction, TV commercials, discount coupons, promotionalstands, exhibitions, buy-one- (or more) gets-one-free.

    PURCHASING POWEROn 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 BRANDSMost respondents considered brands important.

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    4PS OF NIKE

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

    Pricing: Nikes pricing is designed to be competitive to the other fashion shoe retailers. The pricing isbased on the basis of premium segment as target customers. Nike as a brand commands highpremium.

    Place: Nike shoes are distributed to Multi Brand store front and the exclusive Nike stores acrosscountries. While this necessitates a second trip for the customer to come and pick up the shoes, it allowsNike to offer a much wider selection than any of the competition.

    Promotion: Location, targeted advertising in the newspaper and strategic alliances serves as thefoundation of Nike advertising and promotion effort. The athletes and other famous sports personalitiesare 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

    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 WatchNike 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.

    STRENGTHSNike 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 andinnovative product range. They then manufacture wherever they can produce high quality product at thelowest 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 thebusiness 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 retailerstry to pass some of the low price competition pressure onto Nike.OPPORTUNITIESProduct 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 unfashionablebefore 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.

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    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 ofconsumers. There are also global marketing events that can be utilized to support the brand such as theWorld Cup (soccer) and The Olympics.

    THREATSNike 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.

    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 nowcommonly 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 ultimately

    means that consumers are shopping around for a better deal. So if one store charges a price for a pair ofsports 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 likeengineers, software professionals, working executive etc. who effective form 38% of our database. While36% were students from various fields. Others constitute designers and athletes etc. the further study iscarried 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 comparedto 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 SEASONANALYSIS: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 andwhen need arises, whereas the businessman generally do their shoes shopping during traveling or onspecial occasions.

    BRAND RECOLLECTION:

    ANALYSIS:

    When asked about reconciling a sports shoes brand about 70% of the respondent were able to recallREEBOK or ADDIDAS were as rest were able to remember NIKE and FILA brands. This was due to thefact 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 thatthe 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 mostimportant 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 buyingBEHAVIOR between NIKE and OTHERS following was observed:OTHERS NIKEa. 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 brandhence, gave their 30 points to it whereas 20 in case of other brands it was seen that the comfortremains 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 sometime people would like to buy a product because it is being endorsed by their favorite celebrity. It wasobserved that the beside that personal choice of the respondent, the pressure from the friends plays animportant 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 35years 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 associationof the customers with REEBOK. It was deduced that more than 75% of the respondents were using theREEBOK 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.

    CUSTOMER SATISFACTION:ANALYSIS:

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

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    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 37REEBOK 45 55ACTION 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 matterPRICE 50 28 12 10DURABILITY 55 45 0 0BRAND IMAGE 40 20 15 15

    COMFORTABLE 54 36 10 0LOOKS 40 40 15 5

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

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

    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 dontagree with it.

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

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    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. Abrand is not simply a collection of products and benefits, but also a storehouse of value stemming fromawareness, 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 orgroup of sellers and to differentiate from those of competitors. In essence, a brand identifies the selleror 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 todevelop 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 inIndia.

    The secondary brand objective of Nike India would be to ensure that they match the market share andsales volumes of its competitors. After all, a company is in business to make profits and stay ahead ofits 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 wayto achieve this would be some serious brand building. The image of the brand has to be improved andpeople must be made aware of its presence. Thus, the rationale behind choosing improvement of brandimage and reputation as the companys primary objective is quite clear.

    Nikes distinctive competency lies in the area of marketing, particularity in the area of consumerbrandawareness and brand power. On the global scale this key distinctive competency towers over thecompetitors. 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 competencyis leveraged on to India.

    Two key attributes of a distinctive competency are its inability to be easily replicated and the value orbenefit 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 thestrength of Nikes image at the point of purchase. For decades, consumers have come to associate theNike 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 thispositive 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 qualityproducts 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 utilizedproduct differentiation as the main competitive strategy. As Nikes reputation dictates, it will continue toplace emphasis in this area. Nike has built its business on providing products that rise above all othersand 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 Nikesproducts to stand out from the rest. The companys focus also allows it to maintain a somewhat narrowniche 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 asthe first T-shirt for the feet, these shoes can take the shape and size of the wearers feet. Unlike regular shoes itcomes are sizes like XL, L, M, S and XS. Each of these sizes can accommodate three conventional foot

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

    Nike will also focus on making a strong effort in price leadership. Nikes products in the past have beenconcentrated in the higher end of the pricing category. An entrance will now be made into lower pricecategories 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 isproduct warranty. Nike shoes come with a six-month warranty. If the shoe is found to be defective orwears out within six months due to no fault of the wearer, Nike replaces the product. This is only thefirst 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 atthe point of purchase. The form will ask the customer his / her opinion on the product as well as theshowroom. Suggestions and comments would be welcome. However, care must be taken to ensure thatthese forms are not too cumbersome and do not take up too much of the customers time. Surveys haveindicated 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

    them an incentive to make repeat purchases. A most valued customer database could be created fromher e and various forms of direct marketing could be directed at them. This would help the company toretain 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 whichthey are strong. From the viewpoint of mainland consumers, Hong Kong's leather consumer goods areconsidered competitive in the high-end and mid-range. Mainland consumers are brand conscious, and itis 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. Bearingthese in mind, Hong Kong companies should never compromise on quality, and they should allocatemore 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. Seasonalpromotion campaigns, like special discounts and advertisements, could be employed. New lines ofcollections 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 andcrocodile 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 sellersof leather consumer goods. Hong Kong companies should put more emphasis on products for businessuse. 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 consumeremail studies points to an increasing sophistication in consumer usage of email functionality and acorresponding complexity of purchasing behavior. The Spam crisis continues to affect consumer behavior

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    online but does not necessarily cloud consumer receptiveness to legitimate marketers: an overwhelmingmajority 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 forpurchasing, all in attempts to increase control and improve their email experience. Working with BeyondInteractive and the NFO//net source panel of 900,000 US consumers, polled 1,000consumers via emailfrom 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.Thisis the fourth of an annual series of consumer research studies and trending information was derivedusing the data from previous years. The sample mirrored previous studies and is reflective of the onlinepopulation as a whole.Key Findings The majority of consumers receive some kind of marketing email with special offers fromretailers most common Sender recognition most impacts operates, while content relevance increaseslikeliness to purchase Frequency ascertain category, are very specific to the category of email but vary

    greatly from one consumer to the next; frequency of permission based email is clearly a great concernto consumers and has an impact on what they consider to be Spam. Email drives multi-channelpurchases and has an immediate as well as a latent Nearly 64% of consumers cite the line as the mostimportant 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 becomesophisticated 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 aremore 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 consumersreceive 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. Otherpopular 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%) andhousehold tips/recipes/crafts (13.6%).Other categories of strong interest were electronics and computersoftware/hardware, 13.8% and apparel/shoes at12.3%. Permission-based email also continues to be thepreferred 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 compellingreason 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 primarymotivational 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 atthe time, a reflection of the relevancy of the offer, was noted by37.8% of all respondents, outrankingthe 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 foundrecommendations based on past purchasing behavior less appealing (noted by only 28.1% of allrespondents).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 frequencypreferences, with news and weather most often preferred daily, special offers from retailers, online

    merchants and catalogers most often preferred weekly, and account statements/bill paymentcommunications monthly. However, therere significant numbers of consumers who vary in thesepreferences, with just over20% of those who receive special offers and discounts from retailers, onlinemerchants 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 morepronounced 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 DrivesMulti-Channel Purchases But at the Expense of Offline Retail Permission-based emails clearly drivespurchases. 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 increaseslikeliness 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, computersoftware/hardware at 81.4%, gifts/flower sat 77.6%, travel at 77.2%, electronics at77.1% and food at71.7%. The only under performing category was financial products and services at 41.5%, which could

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

    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