Professional Documents
Culture Documents
On
Consumer Behaviour towards
Nike footwear
The information and data given in the report is authentic to the best of my
knowledge.
-Kunal Madaan
CERTIFICATE
This is to certify that the project entitled Marketing Research Project
on Consumer Behaviour towards Nike footwear submitted by Kunal
Madaan, student of Bachelor of Business Studies (BBS) - Keshav
Mahavidyalaya (University of Delhi) is a record of work done under my
supervision.
First of all, I would like to express my gratitude to Ms. Kangan for her kind
help and encouragement. I am very thankful to her for her advice,
assistance, and constant support throughout the preparation of this
report.
I would like to thank all my beloved teachers for their support and
confidence in me.
-Kunal Madaan
INDEX
1. Declaration (i)
2. Certificate (ii)
3. Acknowledgement (iii)
4. Executive Summary 1
6. Motivation 5
7. Basic Software piracy terminology 6
8. Types of Software piracy 7
11 Recommendations 19-20
12. Conclusion 21
13 Limitations 22
14. Bibliography 23
The project report begins with a brief overview of the product category being
dealt with, namely premium quality sports shoes. It also dwells briefly on the
history of the company and its current position and activities.
The project moves on to the crux of the matter the marketing plan to be
followed by Nike in India. Firstly, the objectives behind this plan and the core
strategy are stated. Customers to be eventually targeted are described and
compared with competitors customer targets. After stating the objectives and
reasoning behind them, the actual marketing programs are described in detail.
This includes aspects such as pricing, advertising, promotion, sales, channels,
and the company website. Suggestions are made on each and every one of
these aspects; improvements and innovations are recommended.
The project report then goes on to the customer analysis section. The
customer base is identified and various segments are pointed out. Various
criteria and factors have been taken into consideration while segmenting the
market. We have also tried to ascertain why customers buy these products,
how they choose, and what factors matter most when making their decisions.
The last few pages of this marketing research project deal with the various
ways in which the recommendations, once implemented, can be monitored
and controlled.
RECENT DEVELOPMENTS
Nike India has said that its Faridabad and Mokamehghat units are being
taken over by Fashion Shoe Private Ltd and BDCL Enterprises Pvt Ltd,
respectively. The company is also enabling the buyback provision in its
Articles of association to enable buy back of shares.
The assets and liabilities of both the units will be transferred to these
companies and shares will be offered in the agreed ratio to the existing
shareholders of Nike India Ltd on a record date, which will be fixed by the
Calcutta High Court.
While retail sales have increased both in value and volume, wholesale
sales have declined due to restriction of supplies as a means to recover
customers outstanding. General recession and sluggish market
conditions in the industry also have had a direct impact on lower sales
and profitability. Resistance of consumers to price rises in popular volume
products as well as discounts to clear slow-moving stocks and
underutilization of production capacity adversely affected the operational
results. The lockout declared at the Peenya factory on October 1, 2007
due to serious industrial relation problems and non-compliance with the
tripartite settlement has been withdrawn. The footwear manufactured in
this factory, which was shifted to the companys other factories and
associated manufacturers, will now be gradually produced within the
factory. The commencement of production from this factory will help in re-
cooping the minimal loss being suffered by the company from this
lockout.
FUTURE PLAN
The management says that it is not averse to outsourcing if it worked out
cheaper. It is also open to the idea of importing shoes - mostly from China
- if it works out cheaper. Nike and Reebok India Company have
announced an agreement to foray into retailing partnership for sale of
Reebok and Rockport footwear in Nike outlets. The partnership entails
retailing a range of sports shoes for walking, running, tennis and training
for personal fitness and sports ranging between Rs 900-2,500.
An attractive valuation compared to its peers is the main trigger for the
scrip. Besides, the companys aggressive focus on retailing and
revamping of business (a division into shoes and apparels) is also helping
sentiment for the scrip. Plans are afoot to start selling apparel in India
made by the joint venture North Star. Theres talk that the company is
planning on a voluntary retirement scheme (VRS) to cut costs.
Despite reducing its losses for the last quarter, Nike India has, over the
last few quarters, been continuously recording weak performances as a
result of an overall slowdown in the industry due to lower consumer
spending. Increasing domestic competition, particularly from the
unorganized sector, has also been eroding into the companys market
share.
The company is finding it difficult to maintain its market share in a highly
price-sensitive Indian market, despite having strong brand recall.
97% of the companys revenues are from the domestic market while the
remainder is from exports. Nike India is the biggest player in the Indian
shoe market.
Nike Indias major problems include its high cost of production and low
emphasis on marketing. The company may be able to address the first
problem through outsourcing products. Batas brand image has been
restricted to that of a company that emphasizes on utilitarian products
more than trendy ones. Customers feel the company is lacking in
innovation. Hence, their preference has shifted to other local brands.
Nike India has a large marketing network with over 1,500 showrooms, 27
wholesale depots and eight retail distribution centers across the country.
Nike India has also been trying to focus on aggressive marketing of its
product. The company has been going through a period of transition for
the past one year. With the expansion of the retail industry in New Delhi
and Mumbai, the company has recently decided to shift its marketing
operations to Delhi in order to provide value shopping for its customers.
However, the manufacturing activity and the registered office will continue
at Kolkata.
It is to the companys credit that it has lately overhauled its marketing set-
up into a four-tier retail structure that will be stocked with products
matching the areas customer profile. A Nike outlet in an up market place
will offer a distinctly different range of footwear from another in the
suburbs.
At the same time, with the opening up of the economy, more and more
goods will be imported from China. This may significantly affect Nike
Indias prospects unless it manages to wean away customers with a
drastic cut in costs. Alternatively, like other Indian manufacturers, even
Nike may consider relocating its manufacturing bases in China. However,
it is not that easy a task to undertake.
Place: Nike shoes are distributed to Multi Brand store front and the
exclusive Nike stores across countries. While this necessitates a second
trip for the customer to come and pick up the shoes, it allows Nike to offer
a much wider selection than any of the competition.
RESEARCH METHODOLOGY
Research comprise defining and redefining problems, formulating
hypothesis or suggested solutions; collecting, organizing and evaluating
data; making deductions and reaching conclusions; and at last carefully
testing the conclusions to determine whether they fit the formulating
Hypothesis.
In short, the search for Knowledge through Objective and Systematic
method of finding solutions to a problem is Research.
RESEARCH OBJECTIVES
RESEARCH DESIGN
DATA SOURCES
There are two types of data. Source of primary data for the present study
is collected through questionnaire and answered by consumers of shoes.
The secondary data is collected from journals, books and through Internet
search.
PRIMARY DATA
The data that is collected first hand by someone specifically for the
purpose of facilitating the study is known as primary data. So in this
research the data is collected from respondents through questionnaire.
SECONDARY DATA
For the company information I had used secondary data like brochures,
web site of the company etc. The Method used by me is Survey Method
as the research done is Descriptive Research.
RESEARCH INSTRUMENTS
Selected instrument for Data Collection for Online survey is
Questionnaire.
DICHOTOMOUS QUESTIONS
Which has only two answers Yes or No?
IMPORTANCE SCALE
A scale that rates the importance of some attribute.
RATING SCALE
A scale that rates some attribute like from highly satisfied to highly
unsatisfied or very inefficient to very efficient
SAMPLING UNIT
Who is to be surveyed? The marketing researcher must define the target
population that will be sampled.
SAMPLE SIZE
Consumers of shoes, 50 nos
LIMITATIONS OF RESEARCH
Due to limited time period and constrained working hours for most of
the respondents, the answers at times were vague enough to be
ignored.
FINDINGS
AGE
15-20 33 66%
20-25 13 26%
25-30 4 8%
GENDER
Male 35 70%
Female 15 30%
Q1. Are you brand conscious of footwear?
Yes 37 74%
No 13 26%
Q2. If you are going to buy a pair of sports shoes, which brand
would you like to choose?
Nike 20 40%
Adidas 8 16%
Puma 11 22%
Reebok 6 12%
Other 5 10%
Q3. Which is the most important element when you select footwear?
Brand 28 21%
Quality 33 25%
Price 19 14%
Packaging 2 1%
Comfort 40 30%
Personality 10 7%
Other 2 1%
Q4. Are you brand loyal to any brand below in terms of footwear in
the sportswear industry?
Nike 15 30%
Adidas 5 10%
Puma 8 16%
Reebok 4 8%
Regularly switch to other brands 13 26%
Other 5 10%
Q5. What are the main factors if you switch to buy the footwear of
another brand?
Quality 44 48%
Price 25 27%
Innovation 14 15%
Advertisement 6 7%
Other 2 2%
Yes 16 32%
No 34 68%
Q7. While buying, do you consider environment friendliness in
footwear?
Yes 15 30%
No 35 70%
Yes 22 44%
No 28 56%
Nike 26 52%
Adidas 7 14%
Puma 9 18%
Reebok 6 12%
Other 2 4%
Below are some statements of peoples buying behaviour towards
the footwear. Please check the one box that best indicates how well
the statement describes you personally.
4. I like to buy shoes which are very stylish & of latest design
Strongly Agree 16 32%
Agree 22 44%
Indifferent 8 16%
Disagree 4 8%
Strongly Disagree 0 0%
5. I dont like to spend too much time on deciding my shoes
Strongly Agree 8 16%
Agree 22 44%
Indifferent 7 14%
Disagree 8 16%
Strongly Disagree 5 10%
Price
1 3 6%
2 9 18%
3 19 38%
4 19 38%
5 0 0%
Quality
1 3 6%
2 0 0%
3 9 18%
4 22 44%
5 16 32%
Design
1 3 6%
2 7 14%
3 9 18%
4 22 44%
5 9 18%
Comfort
1 4 8%
2 2 4%
3 9 18%
4 19 38%
5 16 32%
Packaging
1 2 4%
2 7 14%
3 16 32%
4 16 32%
5 9 18%
Personality
1 2 4%
2 2 4%
3 11 22%
4 18 36%
5 17 34%
Innovation
1 4 8%
2 6 12%
3 10 20%
4 20 40%
5 10 20%
Advertisement
1 7 14%
2 4 8%
3 13 26%
4 15 30%
5 11 22%
ANALYSIS AND RECCOMENDATIONS
74% of the people are brand conscious while purchasing shoes for
themselves, whereas 26% do not consider brand name as a
deciding factor for buying shoes.
The deciding factors for buying shoes for people are mainly comfort,
quality and brand name, whereas, packaging and personality do not
matter to people.
SWOT ANALYSIS
STRENGTHS
WEAKNESSES
The retail sector is very price sensitive. Nike does have its own
retailer in Nike Town. However, most of its income is derived from
selling into retailers. Retailers tend to offer a very similar experience
to the consumer. Can you tell one sports retailer from another? So
margins tend to get squeezed as retailers try to pass some of the
low price competition pressure onto Nike.
OPPORTUNITIES
THREATS
The market for sports shoes and garments is very competitive. The
model developed by Phil Knight in his Stamford Business School
days (high value branded product manufactured at a low cost) is
now commonly used and to an extent is no longer a basis for
sustainable competitive advantage. Competitors are developing
alternative brands to take away Nike's market share.
As discussed above in weaknesses, the retail sector is becoming
price competitive. This ultimately means that consumers are
shopping around for a better deal. So if one store charges a price for
a pair of sports shoes, the consumer could go to the store along the
street to compare prices for the exactly the same item, and buy the
cheaper of the two. Such consumer price sensitivity is a potential
external threat to Nike.
ANNEXURE
Questionnaire on Nike footwear
Name
Age
15-20
20-25
25-30
Gender
Male
Female
No
Q2. If you are going to buy a pair of sports shoes, which brand would you
like to choose?
Nike
Adidas
Puma
Reebok
Other:
Q3. Which is the most important element when you select footwear?
Brand
Quality
Price
Packaging
Comfort
Personality
Other:
Q4. Are you brand loyal to any brand below in terms of footwear in the
sportswear industry?
Nike
Adidas
Puma
Reebok
Other:
Q5. What are the main factors if you switch to buy the footwear of another
brand?
Quality
Price
Innovation
Advertisement
Other:
Q6. Have you bought any footwear influenced by any ways of marketing
or branding programs?
Yes
No
No
No
Q10. If you are going to buy a pair of customized footwear, which brand
will you choose?
Nike
Adidas
Puma
Reebok
Other: