Student of Bba at Guru Gobind Singh Indraprastha University

8/2/2019 Student of Bba at Guru Gobind Singh Indraprastha University

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Student of BBA at GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY

New Delhi, Delhi

Institute:GURU GOBIND SINGH INDRAPRASTHA UNIVERSITYStatus: Offline

Posts: 2Join Date: Jun 2008

Location: New Delhi, Delhi

complete project report on nike shoes -August 29th, 2008A SUMMER TRAINING REPORT

ON

MARKETING STRATEGY OF NIKE

AT

NIKESHOES 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 NikeIndustries Limited. The work would not have been possible to come to the present shape

without the able guidance, supervision and help to me by number of people.

With deep sense of gratitude I acknowledge the encouragement and guidance received by my
http://www.managementparadise.com/institutes_desc.php?institute_name=GURU-GOBIND-SINGH-INDRAPRASTHA-UNIVERSITYhttp://www.managementparadise.com/institutes_desc.php?institute_name=GURU-GOBIND-SINGH-INDRAPRASTHA-UNIVERSITYhttp://www.managementparadise.com/institutes_desc.php?institute_name=GURU-GOBIND-SINGH-INDRAPRASTHA-UNIVERSITYhttp://www.managementparadise.com/profile.php?user=sandeepduahttp://www.managementparadise.com/profile.php?user=sandeepduahttp://www.managementparadise.com/profile.php?user=sandeepduahttp://www.managementparadise.com/profile.php?user=sandeepduahttp://www.managementparadise.com/profile.php?user=sandeepduahttp://www.managementparadise.com/institutes_desc.php?institute_name=GURU-GOBIND-SINGH-INDRAPRASTHA-UNIVERSITY


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organizational guide ..and other staff members.

I convey my heartful affection to all those people who helped and supported me during the

course, for completion of my Project Report.

..

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

the global sports shoe giant. It aims first, at analyzing the sports shoe industry India and

finding a place in it for Nike. It then sets out to describe the target audience for the product rangeand finally suggests a host of marketing strategies and activities that will help Nike to achieve its

target of becoming the #1 sports shoe brand in India.

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

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

The project moves on to the crux of the matterthe 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. Afterstarting the objectives and reasoning behind them, the actual marketing programs are described

in detail. This includes aspects such as pricing, advertising, promotion, sales, channels, and the

company website. Suggestions are made on each and every one of these aspects; improvements

and innovations are recommended.

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

various segments are pointed out. Various criteria and factors have been taken into considerationwhile segmenting the market. We have also tried to ascertain why customers buy these products,

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

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

implemented, can be monitored and controlled

TABLE OF CONTENT

1) INTRODUCTION 1-13a) Background of the problem 1

b) About The Nike Industry 3

c) Nike Maxsight 4d) Industry Overview 5

e) Product Trend 8


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2) RESEARCH METHODOLOGY 14-20

a) Research objectives 14b) Research design 15

c) Data sources 15

i) Primary data 15

ii) Secondary data 15d) Questionnaire design formulation 16

e) Sample design 17

f) Limitations of the research 20

3) COMPANY PROFILE 21-43

a) Nike Industries Ltd.A company profile 21b) Recent Development 21

c) Future Plan 23

d) Risk and Concern 28

e) 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

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

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

Customers may not know what they want, and second-guessing them can be expensive, says theprofessor who teaches MBA and PhD marketing and consumer decision-making courses. In

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

complex and less deterministic than has been assumed. Thats because customer preferencesare often ill-defined and susceptible to various influences, and in many cases, customers have

poor insight into their preferences. In one of his recent papers, Simonson tackles the issue of

one-to-one marketing and mass customization. Supporters of these marketing approaches have


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suggested that learning what customers want and giving them exactly what they want will create

customer loyalty and an insurmountable barrier to competition.

In an example taken to the extreme in the 2002 movie Minority Report, Tom Cruises character

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

buy products he had earlier expressed an interest in such as jeans and Ray-Bans, the ultimate 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 onthe long-held assumption that individual marketing will supplant targeted marketing is not sofast. In studies, he has learned that even when customers have well-defined preferences and

receive offers that fit those preferences, it is far from certain that the response to such offers will

consistently be more favorable than those directed at larger market segments.

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

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

what the seller wants them to buy. So, individualized offers depend on customers preferences &;how the offer was extended &; and on trust. Effective individual marketing requires not only an

understanding of individual preferences and matching offers to those preferences, but also a

thorough familiarity with the various factors that impact customers responses, Simonson

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

extent. For example, Amazon keeps track of customers purchases and suggests other books theymight like.Dellbuilds computers from mass-made parts to customers specifications. ButSimonson argues some companies can take the concept too far, like the Custom Foot chain of

shoe stores that took detailed measurements and specifications from each customer to design

one-of-a-kind shoes. Custom Foot didnt take into account that some customers were put off bythe individualized attention, Simonson says, and felt obligated to buy the shoes because the store

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

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

Kipping this in mind, present study will find out and analyze consumer behavior of Nike shoeswith reference to ladies segment.

ABOUT THE NIKE INDUSTRY

In sport, visual acuity and protection can mean the difference between winning and losing. Light
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conditions have a dramatic effect on how the human eye perceives and, subsequently how the

body reacts and performs -- in the sun glinting over the upper deck, shallow contrast on a puttinggreen, or quickly 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 the

development of the new Nike MaxSight Sport-Tint Contact Lens, available August 2005.

WHAT IT IS

Nike MaxSight, developed in partnership with Bausch & Lomb, is a tinted soft contact lens thatbehaves 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 standard sunglasses. 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 of the lens, the frame or the nosepiece, because they dont exist. And there are no

pressure points and no slippage. Max Sight also eliminates light leakage, reducing the need tosquint, allowing the eye to relax and perform more naturally.

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

Nike Maxsight

HOW THEY WORK

Nikes patented Nike MaxSight Light Architecture selectively alters specific wavelengths oflight within the visual spectrum to enhance key elements in sport. The athlete gets crisp, clear

vision without anything getting in their way. By removing most of the blue light, contrast and

clarity are enhanceda decided advantage for any competitor. For sports not conducive to

eyewear, such as golf, tennis and soccer, 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 no bending 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, were able to relax more, and had exceptional views of contours andmovement.

Marco Materazzi of Italys Inter Milan football club and Baltimore Orioles second baseman

Brian Roberts are among the pro athletes wearing Nike MaxSight. It has been a lot of fun to

start the season this hot, said Roberts early in the MLB season. In fact, he became one of thefirst true fans of Nike MaxSight after impressive initial results. During a spring daytime game,

Roberts said, I wore the lenses and went 2 for 4. They are so awesome.

With Nike MaxSight, theres minimal squinting in bright light, and quicker visual definition

when going from bright light to shadows.


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Wearers will also discover a game-day benefitthe look. It makes the eye look distinct, the

large-pupil effect, says Alan Reichow, Nike Vision Consultant. It looks competitive.

ROLL OVER PHOTOS FOR A MAXSIGHT LENSE SIMULATION

THE WEARNike MaxSight is a 30-day lens, though most athletes will wear them selectively and for short

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

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

THE HISTORY

Nike began exploring the Nike Max Sight technology in 1997, conducting an initial clinical

project, then subsequent research projects using collegiate athletes. Oregons Pacific Universitybaseball players were the first athletes to undergo testing. Coach Greg Bradley requested that he

be allowed to try them before his players. Hed never worn contacts, says Dr. Reichow. He

took two pitches and turned around and said, Ive never seen a ball that distinct and clear. Put

them on anybody who wants them.

INDUSTRY 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

understood lexicon of passion and competition. A lot has happened at Nike in the 30 years sincewe entered the industry, most of it good, some of it downright embarrassing. But through it all,

we remain totally focused on creating performance opportunities for everyone who would

benefit, and offering empowering messages for everyone who would listen.

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

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

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

the world's most competitive sports and Fitness Company. The World Headquarters is inBeaverton, Oregon. The Pacific Northwest is Nike's hometown, but like so many ambitious

souls, we have expanded our horizons to every corner of the world. Nike employs around 23,000

people, and every one of them is significant to our mission of bringing inspiration and innovationto every athlete in the world.

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

within and beyond sports.

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

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

equipment and a wholly owned subsidiary of Nike, Inc.


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Nike partnered with Hurley International, a premium teen lifestyle brand founded by 20-yearindustry veteran Bob Hurley based in Costa Mesa, California.

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

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

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

channel. This portfolio of brands includes the Official Starter Properties LLC and Official Starter

LLC which are the sole owners and licensors of the Starter, Team Starter and Asphalt brandnames as well as master licensee of the Shaq and Dunkman brands, a line of athletic apparel,

footwear and accessory products for the value retail channel.

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

Golf.

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

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

bigger picture today than when we started, one that includes building sustainable business withsound labor practices. We retain the zeal of youth yet act on our responsibilities as a global

corporate citizen.

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

PRODUCT TREND

Bovine skin was by far the most preferred leather material, followed by goat/kid/lamb/sheep skinand 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 Segmentswith the Biggest Spending Power Male professionals, managers and executives are the segment

with the biggest spending power for now and in the coming three years. Other major consumer

segments include male office workers; sole proprietors/business owners; female office workers;and female professionals, managers and executives.

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


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retailers consider Hong Kong brands to be either very competitive or quite competitive in both

high-end and mid-range segments, but less competitive in the low-end segment. Thecompetitiveness of Hong Kong brands mainly rests on their product style/design and quality,

with most respondents picking those as the major reasons behind the attractiveness of Hong

Kong brands in the high-end and mid-range segments respectively.

PRODUCT PROFILE

Apart from delivering a pair of comfortable sports shoes Nike also provides a number of value-

added features with its products. The features that are a part of every Nike sports shoe are asfollows.

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

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

the weight of the shoe and reduces pressure on the heels. Besides the overall design andcompactness of the shoes have made it a favorite of many professional athletes around the world.

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

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

his feet while playing.

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

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

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

we draw the example of the authors of this marketing plan. All of us own a pair of Nikes and

have been wearing them for well over two yearsa symbol of the durability of Nike shoes.

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

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


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

the user a definite sense of pride.

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

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

control measures, coming across a defective pair in a store are a rarity. The most recent additionsto their line are the Nike 6.0 and Nike SB shoes, designed for skateboarding. Nike has recently

introduced cricket shoes, called Air Zoom Yorker, designed to be 30% lighter than their

competitors'.[ Nike positions its products in such a way as to try to appeal to a"youthful....materialistic crowd".[5] It is positioned as a premium performance brand.

NIKE 6.O

NIKE SB

RESEARCH METHODOLOGY

Research comprise defining and redefining problems, formulating hypothesis or suggested

solutions; collecting, organizing and evaluating data; making deductions and reachingconclusions; and at last carefully testing the conclusions to determine whether they fit the

formulating Hypothesis.

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

solutions to a problem is Research.

RESEARCH OBJECTIVES

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

To analyze buying behavior of ladies segment of consumers.

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


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The main objectives of this study are:

Working of Insurance Plans

SWOT analysis of the product sold

Comparative study with the competitors

RESEARCH DESIGN

TYPE OF RESEARCH: -

Descriptive research

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

characteristic of this method is that the researcher has no control over the variables; he can onlyreport what has happened or what is happening.

DATA SOURCESThere are two types of data.

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

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

Internet search.

PRIMARY DATA

The data that is collected first hand by someone specifically for the purpose of facilitating thestudy is known as primary data. So in this research the data is collected from respondents

through questionnaire.

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 INSTRUMENTS

Selected instrument for Data Collection for Survey is Questionnaire.

QUESTIONNAIRE DESIGN FORMULATION

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

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

objective type questions are prepared for the respondents with fixed response categories. Someof 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


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

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

TYPES OF QUESTION INCLUDED:

DICHOTOMOUS QUESTIONS

Which has only two answers Yes or No?

MULTIPLE CHOICE QUESTIONS

Where respondent is offered more than two choices.

IMPORTANCE SCALE

A scale that rates the importance of some attribute.

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 anddifferent profession

EXTENT:-

Where the survey should be carried out?I have covered entire residential area of Delhi city for the survey

TIME FRAME:-When the survey should be conducted?

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

SAMPLING FRAME:-

The source from which the sample is drawn

SAMPLING TECHNIQUE: -How should the respondent be chosen?

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

sampling design the sampling design chosen is stratified random sampling.Because in this survey I had stratified the sample in different age group, different gender and

different profession


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

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

(ii) Internet sites containing information on Nike shoes & marketing are browsed.(iii) Sample survey was conducted.

(iv) Data was thoroughly checked for error.

DATA PROCESSING METHODOLOGY

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

modified.

(ii) Tabulationbring 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 oftenthe interview. Generally editing is required for open type of questions. Brief notes or symbols are

frequently used during the interview to initially record the interviewers response since it was notdesirable to interrupt the flow with lengthy note taking. Then immediately after the interview,

brief notes are respondent. The responses are thoroughly checked in home for incorrect,

inconsequential or contradictions categories are developed only often the replies has beenreviewed. This review provided a feel for the pattern of answers and thus determine what

categories best represent the answers.

The collected data are placed into an order. Percentages of respondents answered similarly arecalculated and placed in a table. Then this is interpreted. This involved drawing conclusion from

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

information that is pertinent or relevant to the study.

CONCLUSION WAS DRAWN BASED ON THE SURVEY FINDINGS

Finally recommendation was made to improve the sales strategy of Nike shoes to increase thesales volume in ladies segment.

SAMPLE DESIGNTHE BASIS OF SAMPLING: -

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

obtained.

LIMITATIONS OF RESEARCH

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

particularly reflection of the current behavior.


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BIASES AND NON-COOPERATION OF THE RESPONDENTS.

The collected data are placed into an order. Percentages of respondents answered similarly arecalculated and placed in a table. Then this is interpreted. This involved drawing conclusion fromthe gathered data. Interpretation changes the new information immerging from the analysis into

information that is pertinent or relevant to the study.

Due to limited time period and constrained working hours for most of the respondents, theanswers at times were vague enough to be ignored.

Most of the people in India take their Nike Shoes in the period preceding March & so theresponse to initial contacts were not all encouraging and that has been the primary reason in the

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

COMPANY PROFILE

NIKE INDUSTRIES LTD.A COMPANY PROFILE

Nike India Ltd (BIL) is Indias largest footwear company. Nike first established itself in India in

1931 and commenced manufacturing shoes in Batanagar in 1936. The company has itsHeadquarters in Kolkata and manufactures over 33 million pairs per year in five plants located in

Batanagar (West Bengal), Faridabad (Haryana), Bangalore (Karnataka), Patna (Bihar), Hosur

(Tamil Nadu). It secures its leather supply from two tanneries in Mokamehghat (Bihar) and

Batanagar (West Bengal). It has a distribution network of over 1,500 retail stores and 27wholesale depots provide excellent access to consumers and wholesale customers throughout

India.

As on December 31, 2006, the Canadian parent had a 51 per cent stake while institutionalholding was about 13 per cent.

RECENT DEVELOPMENTS

Nike India has said that its Faridabad and Mokamehghat units are being taken over by FashionShoe Private Ltd and BDCL Enterprises Pvt Ltd, respectively. The company is also enabling the

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

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

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

which will be fixed by the Calcutta High Court.

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

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

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

profitability. Resistance of consumers to price rises in popular volume products as well asdiscounts to clear slow-moving stocks and under utilization of production capacity adversely

affected the operational results. The lockout declared at the Peenya factory on October 1, 2007

due to serious industrial relation problems and non-compliance with the tripartite settlement hasbeen withdrawn. The footwear manufactured in this factory, which was shifted to the companysother 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 lossbeing suffered by the company from this lockout.


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

complex and less deterministic than has been assumed. Thats because customer preferencesare often ill-defined and susceptible to various influences, and in many cases, customers have

poor insight into their preferences. In one of his recent papers, Simonson tackles the issue of

one-to-one marketing and mass customization. Supporters of these marketing approaches havesuggested that learning what customers want and giving them exactly what they want will create

customer loyalty and an insurmountable barrier to competition.

But Simonson has this to say: The fact that consumer preferences are often fuzzy, unstable, andmanipulatable is unlikely to change. So, the effectiveness of methods to give customers exactly

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

that individual marketing will supplant targeted marketing is notso fast. In studies, he has

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

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

favorable than those directed at larger market segments.

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

could match expectations. Those who dont know what they want may not ever see the fit withwhat the seller wants them to buy. So, individualized offers depend on customers preferences &;how the offer was extended &; and on trust. Effective individual marketing requires not only an

understanding of individual preferences and matching offers to those preferences, but also athorough familiarity with the various factors that impact customers responses, Simonsonwrites. 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.Dellbuilds computers from mass-made parts to customers specifications. ButSimonson argues some companies can take the concept too far, like the Custom Foot chain of

shoe stores that took detailed measurements and specifications from each customer to design

one-of-a-kind shoes. Custom Foot didnt take into account that some customers were put off by

the individualized attention, Simonson says, and felt obligated to buy the shoes because the store

went to so much trouble. They often didnt come back. So knowing only the 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 shoeswith reference to ladies 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 andReebokIndia Company have announced an agreement to foray into retailing

partnership for sale of Reebok andRockportfootwear in Nike outlets. The partnership entailsretailing 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
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made by the joint venture North Star. Theres talk that the company is planning on a voluntary

retirement scheme (VRS) to cut costs.

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

(Rs 8.51 crore) on a 9.2% increase in net profit to Rs 154.27 crore (Rs 141.26 crore). Despite

reducing its losses for the quarter, Nike India has, over the last few quarters, been continuouslyrecording 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 fromexports. Nike India is the biggest player in the Indian shoe market.

Nike Indias majorproblems include its high cost of production and low emphasis on marketing.

The company may be able to address the first problem through outsourcing products. Batasbrand 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, theirpreference has shifted to other local brands.

Nike India has a large marketing network with over 1,500 showrooms, 27 wholesale depots andeight retail distribution centers across the country.

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

country. However, in spite of this and the license to sell other brands like Nike, Hush Puppiesand Lotto, Nike has not been able to improve sales consistently. The recent rise in sales during

the third quarter ended September 2006 can be attributed to the festive season. Recently, it also

entered into a retailing tie-up for Lee Cooper shoes.

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

has been going through a period of transition for the past one year. With the expansion of the

retail industry in New Delhi and Mumbai, the company has recently decided to shift itsmarketing operations to Delhi in order to provide value shopping for its customers. However, the

manufacturing activity and the registered office will continue at Kolkata.

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

manufacturing. The company has put a fresh focus to its retail business. The company has

decided to cleanse its wholesale operation by building relationships with credit-worthy buyers.

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

retail structure that will be stocked with products matching the areas customer profile. A Nike

outlet in an up market place will offer a distinctly different range of footwear from another in thesuburbs.

At the top of the four-tier structure will be international stores stocking brands like Nike and
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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 andHush Puppiesfor the top end of the market. Third in line will be family stores

at commercial locations displaying basic and mid-range footwear. At the bottom will be bazaar

stores that will basically aim at driving volume sales at lower price points.

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

focus on stores configuration, distribution logistics, better industrial relations and overhead

rationalization. Launching of new products always remained at the center stage of the companysoperations.

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

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

undertake.

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

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

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

to restructure its 1,300-outlet strong retail business division along specific customer segmentsinto 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 wouldbe like a brand champion responsible for procurement, production, advertisement, promotion and

re-supply.

Nike India has roped in Ogilvy & Mother for devising its festive season advertising, side-stepping JWT, its incumbent agency. The job involves developing special communication

directed towards the festival season shoppers.

Nike India Ltd (BIL) is Indias largest footwear company selling over 60 Mn pairs per year inIndia, USA, UK, Europe, Middle East and Far East. BIL has a market share of 60% in leather

products and 70% in canvas shoes.

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

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

Indian players such as Liberty Shoes, Phoenix International, Mirza Tanners, Tatas, Action Shoesand Lakhani Shoes and global players like Adidas,Reebokand Nike. Accessories and garments

contribute footwear sales account for more than 96% of sales while the balance. The turnover

break up is as follows

Products Volume (%) Value (%)

Rubber and Canvas 50: 30

Leather 29 :57
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Plastic 21: 9

GROWTH DRIVERS

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

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

POPULAR BRANDS

Nike owns brands likeHush Puppies, Signor, Marie Claire Power, Sandak, Hawai, Naughty boyand Ambassador. It also distributes other brands such as Nike and Lotto.

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

customers. It is introducing budget stores which will help customers to identify with the brand.It is also increasing focus on rural thrust for volume growth in the low-priced footwear segment.

RISK AND CONCERN

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

imports. Labor issues have always bothered BIL and this resulted in disruption of manufacturingactivities on numerous occasions. Competition is hotting up in the domestic market due to

popular brands such as Gaitonde, Red Tape, Lotus Bawa and Tatas. These brands are gaining

market share especially in the premium segment and in this segment BIL has no significantpresence.

Latest Results Sales for Q3 FY2000 increased by 5.5% yoy to Rs1.7bn. profits dropped by 90%yoy to Rs3.8 Mn due to lower operating margins and higher depreciation and interest.

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

23.4 Mn.

Operating margins dropped by 3.3% due to increase in input cost. The Peenya plant has notcommenced operations despite lifting up of the lock out since July 3, 2007.

VALUATION

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

which it can adopt to meet threat of imports and competition from local footwear companies.Long term investors with a two-year investment horizon can accumulate the stock at current

levels. It is also increasing focus on rural thrust for volume growth in the low-priced footwear

segment.

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

imports.

Labor issues have always bothered BIL and this resulted in disruption of manufacturing activitieson numerous occasions.

Competition is hotting up in the domestic market due to popular brands such as Gaitonde, RedTape, Lotus Bawa and Tatas. These brands are gaining market share especially in the premium

segment and in this segment BIL has no significant presence.
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Sales for Q1 CY2001 decreased marginally by 0.6% yoy to Rs 1590.7 mn. There was a net lossof Rs 30.2 mn as against a profit of Rs 39.6 mn in the corresponding period of the previous year.

The loss is due to lower operating margins and higher interest.

BILs long-term success is dependent on the labor issue and the flexibility, which it can adopt to

meet threat of imports and competition from local footwear companies. Long term investors witha two-year investment horizon can accumulate the stock at current levels.

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

Q1200003

Sales 7,315.70 7,103.90 6,353.20 1590.7 1600.9% Growth 2.98 11.82 (0.6)

Net Profit 304.60 242.60 166.30 (30.2) 39.6

% Growth 25.56 45.88 (176)

EPS(Rs) 5.90 4.70 3.20 3.08% Growth 25.53 46.88

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

OPM(%) 9.77 9.08 7.16 1.09 6.9

NPM(%) 4.16 3.42 2.62 2.5ROE(%) 8.95 7.44 5.31

Nike understated 9 month losses -

Brief Financials (in Rs. Mn.)Detailed Quarterly

Period ending (months)30-Sep-2007 (9)31-Dec-2006(12)31-Dec-2006 (12)

Net sales 4980.206461.177172.91

Other Income42.1063.6165.21

Total Income5022.306524.777238.12Cost of goods sold4974.706471.797051.76

OPBDIT47.6052.98186.36

PAT-117.20-74.1039.80Gross Block-2191.072062.26

Equity capital-514.22514.22

EPS (Rs.)--1.440.77DPS (Rs.)-0.000.75

BV (Rs.)-37.2738.71

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

Debt / Equity (x)-0.320.26Operating margin (% of OI) 0.90.82.6

Net margin (% of OI)-2.3-1.10.5

As on 30 June 2007, the public, institutions and foreign bodies held31.23%, 13.91% and 0.16% stake in the company, respectively


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LITERATURE REVIEW

The study of consumer behavior has evolved since the Information Processing Model (Bettman,1979) assumed that the individual is logical in his/her buying process. This model was criticized

because it failed to treat different consumption phenomena motivated by symbolic meanings

(Holbrook and Hirschman, 1982). Individuals are not always looking for efficiency and

economy, but also for distraction, aesthetic, expression, etc. (Boyd and Levy, 1963). Calling fora 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 pleasant aspects of consumption were then tackledfrom an experiential point of view. The Experiential View is a phenomenological perspective

that perceives consumption as a primary state of consciousness having a variety of symbolic

meanings, responses and hedonist criteria (Holbrook and Hirschman, 1982; Olshavsky and

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

the utility of a product under the basis of a utilitarian evaluation of its tangible characteristics.Nevertheless, it neglects emotional aspects. On the other hand, the Experiential View leaves out

different factors such as economic conditions, expectations, some elements of the marketing mix(price, distribution), perceived risk and conflicts, but mostly the social influence of the

consumers reference groups (Holbrook and Hirschman, 1982; Business Central Europe, 1994)

which is the aim of the Symbolic Interactionism Perspective. Acquisition, possession andconsumption are activities taking place in a process of impressions creation or identity

management which is, according to Belk (1978), an interactive process concerning both the

image of goods consumed and that of the individuals consuming them. The Symbolic

Interactionism Perspective deals with the relationship between consumers and the products theyconsume, and suggests that a significant proportion of consumption behaviors consist of social

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

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

of symbols and those of consumption. With the aforementioned meanings being negotiated andbuilt through interactions with others, consumption is not only an individual activity, but also a

social process of goods definition (Gallant and Kleinman, 1983). Since individuals are often

motivated to acquire products according to what they mean to them and to members of theirsocial reference groups (Leigh and Gabel, 1992), their behavior is subject to the pressures of

cultural norms and the expectations of socialization institutions rules such as those coming from

family and other reference groups (Faber, OGuinn and McCarthy, 1987; Engel, Blackwell andMiniard, 1993). Thus, Symbolic Interactionism Perspective considers the human spirit as

fundamentally social, and dependent on shared symbols. The symbols being generated at a

global level (Geertz, 1973; Solomon, 1983; McCracken, 1986, 1988; Leigh and Gabel, 1992),

the Symbolic Interactionism Perspective accepts as precept the fact that society and its cultureprecede 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

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


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

but that is nevertheless identified with the product. The image variables emerge from fourcognitive representations individuals have of their environment: the symbolism of advertising,

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

The made-in is considered by Dichter (1962) as the fifth element of the marketing mix, and isdefined as the country where are located the corporate headquarters of the organization doing the

marketing of the product or the brand (Johansson, Douglas and Nonaka, 1985). The country of

origin carries a rhetoric that influences consumers preconceptions towards the products of acountry. Its meaning can be conceived as an indication serving as a basis of evaluation (Bilkey

and Nes, 1982), when one considers a product as a bundle of information. Consequently,

according to Kaynak and Cavusgil (1983), the images of a foreign country that are formed byconsumers are made of cognitive, affective and behavioral components. The first one represents

the perceived characteristics of the country. The second one concerns the appreciation or not of

those characteristics, and the third one corresponds to the actions about the country that the

consumer feels are appropriate. A tendency to evaluate positively the local production compared

to imported production, and biases in favor of industrialized countries have been found inprevious 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 enteringforeign markets, sellers often face quotas, tariffs, and non-tariff barriers. In addition, they may

face an intangible barrier in the form of consumer bias on the basis of product origin (Schooler,

1971).

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

involvement of the consumer in purchasing the product and the presence of other cues such as

brand name, guarantee and price (Ahmed and dAstous, 1993). In a recently published meta-analysis of country-of-origin effects, Peterson and Jolibert (1995) conclude that the average

effect size is lower (0.19) for purchase intention, higher (0.30) for quality/reliability perceptions

and context dependent. More specifically, they found that the characteristics of the study

(research design, type of respondents, study cues, sample size, stimulus context etc.) influencethe relative effect of country-of-origin to a lesser degree for quality/reliability perceptions than

for purchase intention. However, the type of respondents (students, consumers or

businesspeople) had no influence on quality/reliability perceptions.

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

Columbia University, asked a group of 195 Columbia students to do; eat a lot ofsushi.Participants were offered a "frequent diner" program that would reward them for their

patronage at various university dining locations and given a card that would track their

purchases. They were randomly assigned to one of two groups those in the "low" requirement

group were told they would have to purchase 12 sandwiches to get two free movie tickets,whereas those in the "high" requirement group were told they would have to purchase 12

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

much more to receive the same reward. Kivetz and Simonson also asked participants how muchthey liked sushi relative to the typical student. The result? Students who liked sushi were much

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

sandwiches and 12 orders of sushi. "It shows a common mistake that consumers make & if they


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see an offer that seems to fit them better than other consumers, for example, a program that

requires sushi-lovers to eat sushi that fit completely colors their assessment of how attractive theoffer is," Simonson says. "As a result, by creating what appears like personal fit, marketers can

attract consumers to frequency programs and many other promotional offers." Kivetz and

Simonson replicated these findings regarding influences on participation in frequency, or loyalty,

programs in studies with travelers interviewed at domestic airports.The sushi study is among anumber of studies Simonson has been conducting since the late 1980s about how consumers

make choices. Much of his work debunks the accepted theory that giving consumers what they

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

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

second-guessing them can be expensive. In his words, The benefits and costs of fittingindividual customer preference are more complex and less deterministic than has been assumed."

That's because, Simonson says, "customer preferences are often ill-defined and susceptible to

various influences, and in many cases, customers have poor insight into their preferences."

In another recent paper, Simonson tackles the issue of one-to-one marketing and masscustomization. Supporters of these marketing approaches have suggested that learning what

customers want and giving them exactly what they want will create customer loyalty and aninsurmountable barrier to competition. In an example taken to the extreme in the 2007 movie

Minority Report, Tom Cruise's character Anderson runs through a shopping mall past talking

billboards that recognize him by name and urge him to buy products he has expressed interest insuch as jeans and Ray-Bans; the ultimate in personalized advertising. But Simonson has this to

say: "The fact that consumer preferences are often fuzzy, unstable, and manipulatable is unlikely

to change. So, the effectiveness of methods to give customers exactly what they (say they) want

has been grossly exaggerated." His take on the long-held assumption that individual marketingwill supplant targeted marketing is "not so fast." That's because consumers are very difficult to

figure out, science fiction and technology notwithstanding. "Furthermore, even when customers

have well-defined preferences and receive offers that fit those preferences, it is far from certain

that the response to such offers will consistently be more favorable than those directed at largermarket segments."

It's all psychology. Consumers with well-defined preferences may be skeptical that a marketercould match expectations. Those who don't know what they want may not ever see the fit with

what the seller wants them to buy. So, individualized offers depend on customers' preferences;

how the offer was extended & and on trust. "Effective individual marketing requires not only anunderstanding of individual preferences and matching offers to those preferences, but also a

thorough familiarity with the various factors that impact customers' responses," he writes.

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

example, Amazon keeps track of customers purchases and suggests other books they might like.Dellbuilds computers from mass-made parts to customers' specifications. But Simonson argues

some companies can take the concept too far, like the Custom Foot chain of shoe stores that tookdetailed measurements and specifications from each customer to design one-of-a-kind shoes.

Simonson argues that Custom Foot didn't take into account that some customers were put off by

the individualized attention and felt obligated to buy the shoes because the store went to so much
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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 and

marketing, 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 aproduct when they shop for it online. Many companies are looking at online customization as the

future of online business Janis Crow, Kansas State University marketing instructor, researched

how people make choices on the Internet. She recently studied consumers in an onlineenvironment and their ability to customize several products - pizza, shoes, and electronic

devices.

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

customize a product, and secondly, how likely is the person to purchase the product he or she has

customized?

All participants in the study chose to customize products. In terms of customers likelihood topurchase, a greater number of customers made purchase decisions when there are more options

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

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

needs. Crow selected three generic products: pizza, shoes, and a Personal Digital Assistant(PDA). Thirty-one college students took part in the study.

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

attributes to choose from," she explained. Consumers could click on a drop-down box tocustomize a product they would want to purchase, she said. She found that more people relied on

the default choices rather than selecting other choices that were offered. She said, some research

suggests that many people do not want to put a lot of effort into purchase decisions. "A lot of

times, people may not have preferences already in mind," she said. When consumers have thechance to create preferences, the question is whether they rely on previous preferences or if they

develop new ones, she said. In the future, Crow says she will be studying strategies that

consumers go through during purchase decisions. "I will be studying decision processes todevelop computer aids that could help the consumer reach their purchase decision," she said.

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

online environment, in future projects she plans to analyze other demographic groups.Customization will be a key business opportunity in the future for businesses online or in more

typical shopping environments," Crow said.

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

determine products to offer and how to offer them.

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

interest in tapping the mainland consumer market after China's accession to the World Trade

Organization and gradual opening of its domestic market. For Hong Kong companies targeting


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this vast market, a good understanding of the behavior of mainland consumers is necessary in

order to formulate an effective and suitable market strategy.

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

2007. The study was composed of two interlocking surveys. The first survey (survey on

shoppers) successfully interviewed a total of 1,000 shoppers of leather consumer goods in fourmajor 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 biggestspending power. The main survey findings are as follows:

CONSUMER BEHAVIORShopping locations, Department stores were the most preferred type of retailers, followed by

outlets in shopping malls and chain stores. Product variety, guaranteed quality, brand choice,price, services and store environment were cited as the major reasons for visiting a leather

consumer goods store.

SHOPPING TIME

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

Shopping during weekends is common. Other popular shopping occasions include National Day(1st October), Chinese New Year (January/February), New Year's Day (January) and Labour

Day (1st May).

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

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

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

PURCHASING POWER

On average, respondents owned 4.2 pairs of shoes, 1.2 pieces of wallets, 1.3 pieces of belts and1.3 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 CRITERIA

When choosing leather consumer goods, product quality stood out as the principal consideration


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

POPULAR BRANDS

Most respondents considered brands important.

4PS OF NIKE

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

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

commands high premium.

Place: Nike shoes are distributed to Multi Brand store front and the exclusive Nike stores acrosscountries. While this necessitates a second trip for the customer to come and pick up the shoes, it

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

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

foundation of Nike advertising and promotion effort. The athletes and other famous sportspersonalities are always taken as brand ambassadors. They form the prime building blocks of

their portion strategy.

Product: The product range of Nike comprise of shoes, sports wear, watches etc. Its producthistory began with long distance running shoes in 1963. (Past 17 years: Air Jordan basketball

shoes). Wide range of shoes, apparel and equipment. For example:

Nike Oregon Digital Super Watch

Nike Presto Cee Digital Medium Watch

Nike Presto Cee Digital Small Watch

Nike Ron Analog Watch

Nike Triax 10 Regular Watch

Nike Triax Armored II Analog Super Watch

Nike Women's Imara Fit Digital Watch

SWOT ANALYSIS

SWOT ANALYSIS NIKE, INC.

STRENGTHS

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

saying that 'Business is war without bullets.' Nike has a healthy dislike of is competitors. At the

Atlanta Olympics, Reebok went to the expense of sponsoring the games. Nike did not. HoweverNike sponsored the top athletes and gained valuable coverage.


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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 byits evolving and innovative product range. They then manufacture wherever they can producehigh quality product at the lowest possible price. If prices rise, and products can be made more

cheaply elsewhere (to the same or better specification), Nike will move production.

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

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

WEAKNESSES

The organization does have a diversified range of sports products. However, the income ofthe business is still heavily dependent upon its share of the footwear market. This may leave it

vulnerable if for 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 marginstend to get squeezed as retailers try to pass some of the low price competition pressure ontoNike.

OPPORTUNITIES

Product development offers Nike many opportunities. The brand is fiercely defended by itsowners whom truly believe that Nike is not a fashion brand. However, like it or not, consumersthat wear Nike product do not always buy it to participate in sport. Some would argue that in

youth culture especially, Nike is a fashion brand. This creates its own opportunities, since

product could become unfashionable before it wears out i.e. consumers need to replace shoes.

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

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

The business could also be developed internationally, building upon its strong global brandrecognition. There are many markets that have the disposable income to spend on high value

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

generation of consumers. There are also global marketing events that can be utilized to supportthe brand such as the World Cup (soccer) and The Olympics.

THREATS

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

and so costs and margins are not stable over long periods of time. Such an exposure could mean

that Nike may be manufacturing and/or selling at a loss. This is an issue that faces all globalbrands.

The market for sports shoes and garments is very competitive. The model developed by PhilKnight 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 competitiveadvantage. Competitors are developing alternative brands to take away Nike's market share.


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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 aprice for a pair of sports shoes, the consumer could go to the store along the street to compareprices 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 fieldslike engineers, software professionals, working executive etc. who effective form 38% of our

database. While 36% were students from various fields. Others constitute designers and athletes

etc. the further study is carried on the buying behavior of the above mentioned categories ofconsumer, 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 ascompared to the working class professionals who were ready to spend between Rs 3000 Rs

6000, since they have higher spending power because of higher income levels.

SHOPPING SEASON

ANALYSIS:

Amongst the student and the professional it was found the consumer buying BEHAVIOR does

not change with respect to the seasons and occasion as most of the consumer would like to buytheir shoes as and when need arises, whereas the businessman generally do their shoes shopping

during traveling or on special occasions.

BRAND RECOLLECTION:


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

recall REEBOK or ADDIDAS were as rest were able to remember NIKE and FILA brands. This

was due to the fact that REEBOK has brand ambassador like RAHUL DRAVID and YUVRAJ

SINGH.

FACTOR INFLUENCING THE BUYING PROCESS:ANALYSIS:

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

observed that the consumer give more preference to his personal choice and psychologicalfactors like 50% of the people consider comfort and they generally do not consider durability as

an important aspect because they believe that it comes along with the brand. Also the social

factor like style was second most important factor behind the consumer buying motives.

(B) COMPARISON WITH OTHER BRANDS

ANALYSIS:

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

buying BEHAVIOR between NIKE and OTHERS following was observed:OTHERS NIKE

a. Style ____20____ ___30_____

b. Price ____10____ ___10_____c. Comfort _____30___ ___30_____

d. Brand ____10____ ___20_____

e. Durability _____30___ ___10____

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

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

comfort remains at equal place even while choosing a competitive brand.


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BUYING FORCES

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

some time people would like to buy a product because it is being endorsed by their favorite

celebrity. It was observed that the beside that personal choice of the respondent, the pressure

from the friends plays an important buying force for the students, while the peer and college incase of the professional and the least pursuing factor is family which was seen in case of the

respondents belonging to age group 35 years and above.

NO OF PEOPLE BUYING NIKESHOES & REEBOK SHOES:ANALYSIS:

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

association of the customers with REEBOK. It was deduced that more than 75% of the

respondents were using the REEBOK shoes and were mainly associated with it for a period of 1

year or more. While the remaining respondents were using either the NIKE or ADDIDAS brandshoes.

CUSTOMER SATISFACTION:ANALYSIS:

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

either very satisfied or satisfied, while 10% did not gave any response as they were not using the

REEBOK shoes.

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

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

4. Which brand do you generally use?


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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 WHYNIKE 43 57

ADIDAS 63 37

REEBOK 45 55

ACTION 30 70

Most of the people are influenced with Adidass ad, then with Reebok and then Nike. The mostun-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 10

DURABILITY 55 45 0 0

BRAND 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. Alongwith that looks and the brand image is also important.

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


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The most liked feature of Nike is the light weight shoe. Then it is the enhanced toe support. Fromhere we can infer that most important aspect for the consumers is the comfort they get from the

shoes.

8. What range you prefer?

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

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

7500 and lesser no. of people buy shoes ranging in between 3500 and 5500.

9. How often you buy Nike?

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

10. Are you satisfied buying Nike?

The people who buy Nike are fully satisfied buying it, their percentage is 64%. Only 15 % are


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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

dont agree with it.

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

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

CONCLUSION & FINDINGS

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

equity. A brand is not simply a collection of products and benefits, but also a storehouse of value

stemming from awareness, loyalty, and association of quality and brand personality. A brand is a

name, term, sign, symbol or design or a combination of them intended to identify the goods orservices of one seller or group of sellers and to differentiate from those of competitors. In

essence, a brand identifies the seller or maker. It can convey up to six levels of meaning:

Attributes, Benefits, Values, Culture, Personality and User. If a company treats a brand only as aname it misses the point. The branding challenge is to develop a deep set of positive associations

for the brand.


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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 onthese pillars in India.

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

and sales volumes of its competitors. After all, a company is in business to make profits and stayahead of its competitors. A company, product or brand may have a very good reputation and

image, but if it is not profitable, it does serve its purpose. At the same time sales figures and data

can be misleading. Hence market share has also to be paid attention to.

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

Yet, there is reason to believe that Batas Power and Liberty would be ahead of Nike in terms ofpopularity. We also notice that Nike is at par with Reebok. This again does not reflect too well

on the brand, considering that Nike outsells Reebok everywhere else in the world.

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

best way to achieve this would be some serious brand building. The image of the brand has to beimproved and people must be made aware of its presence. Thus, the rationale behind choosing

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

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

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

over the competitors. As a result, Nikes market share is number-one in the athletic footwear

industry in most places around the world. Catch phrases like, "Just Do It," and symbols like the

Nike "Swoosh," couple with sports icons to serve as instant reminders of the Nike Empire. It is

about time that this competency is leveraged on to India.

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

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

resources to promote it. This ultimately translates into added value for consumers. The publicbenefits from the strength of Nikes image at the point of purchase. For decades, consumers havecome to associate the Nike image with quality products. By associating star athletes and

motivational slogans like, "Just Do It," with marketing campaigns that emphasize fitness,competition, and sportsmanship, consumers identify their purchases with the prospect of

achieving greatness. Younger consumers especially benefit from this positive influence. This

image is something that competing companies can not easily duplicate by simply enhancing thephysical characteristics of their products.

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

quality products that have been provided in the past. Most importantly, Nike will continue tomeet the ever-changing needs of the customers, through product innovation. In the past, the

company has utilized product differentiation as the main competitive strategy. As Nikes

reputation dictates, it will continue to place emphasis in this area. Nike has built its business onproviding products that rise above all others and this has made it the worldwide success that it is

today.


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

allows Nikes products to stand outfrom the rest. The companys focus also allows it to maintaina somewhat narrow niche that enables it to effectively capture the needs and wants of the

consumers. An example of Nikes superior and innovative technology is its new range of shoes

called Air Presto. Termed as the first T-shirt for the feet, these shoes can take the shape and

size of the wearers feet. Unlike regular shoes it comes are sizes like XL, L, M, S and XS. Eachof these sizes can accommodate three conventional foot sizes. Nike will continue to produce

such path-breaking products in the future and stay a step ahead of its competitors.

Nike will also focus on making a strong effort in price leadership. Nikes products in the pasthave been concentrated in the higher end of the pricing category. An entrance will now be made

into lower price categories with these quality products. This will enable Nike to capture an evengreater hold on market share.

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

India is product warranty. Nike shoes come with a six-month warranty. If the shoe is found to bedefective or wears out within six months due to no fault of the wearer, Nike replaces the product.

This is only the first step and more needs to be dome in this area.Being a company that always strives towards excellence, Nike needs to know exactly what its

customers think about their products. A good way of assessing this would be to have the

customer fill in a form at the point of purchase. The form will ask the customer his / her opinionon the product as well as the showroom. Suggestions and comments would be welcome.

However, care must be taken to ensure that these forms are not too cumbersome and do not take

up too much of the customers time. Surveys have indicated that normally people dont mind

filling in forms as long as they are not too long.

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

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

the product. After he crosses a certain point level, he would be entitled to a gift from thecompany or choose a product 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 from her e and various forms of direct marketing could be directed atthem. This would help the company to retain its existing customers.

A third way to improve customer relationship would be to issue gift coupons and vouchers.People would have the facility to buy these vouchers and present them to their dear ones. This

would be a good way to reach out towards newer customers through existing ones.

RECOMMENDATIONS

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

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

consumer goods are considered competitive in the high-end and mid-range. Mainland consumers


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are brand conscious, and it is vital to promote own brands which have clear image.

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

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

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

OTHER SUGGESTION INCLUDE

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

addition, store decorations and product displays should be designed to create a strong firstimpression. Seasonal promotion campaigns, like special discounts and advertisements, could be

employed. New lines of collections should be introduced for festivals.

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

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

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

categories. Meanwhile, leather shoes offer better growth potential.

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

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

Due to their growing spending power, the rising middle class should be the target of HongKong's sellers of leather consumer goods. Hong Kong companies should put more emphasis on

products for business use. In addition, it is useful to introduce appropriate designs that cater for

the tastes of the middles class.

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

consumer email studies points to an increasing sophistication in consumer usage of email

functionality and a corresponding complexity of purchasing behavior. The Spam crisis continues

to affect consumer behavior online but does not necessarily cloud consumer receptiveness tolegitimate marketers: an overwhelming majority of online consumers receive offers by email and

have made a purchase online or offline as a result. Consumers are using available tools to limit

spam and are employing operate email accounts for purchasing, all in attempts to increasecontrol and improve their email experience. Working with Beyond Interactive and the NFO//net

source panel of 900,000 US consumers, polled 1,000consumers via email from July 30 -

August5, 2007. All respondents recruited use email/internet 1+ times per week, which reflectsthe usage of the larger online population (94% of the 18+ online population according to Nielsen,

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

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

using the data from previous years. The sample mirrored previous studies and is reflective of theonline population as a whole.

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

offers from retailers most common Sender recognition most impacts operates, while contentrelevance increases likeliness to purchase Frequency ascertain category, are very specific to the

category of email but vary greatly f

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