CB Kabhi B

7/29/2019 CB Kabhi B

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This case addresses the difficult problems faced

by a company trying to market products at the

mature stage in their life cycle, with the added

complication of intense competition and rapidlychanging consumer tastes.

Nike, the maverick Oregon-based company

whose name virtually means running shoes tomany Americans, was in such a market in the mid

1980s.


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In the mid-1980s, Nike was still the largest athletic-shoe marketer in the U.S. with about 1/3 of themarket.

Converse, another U.S. company was second placewith about 10 to 12 percent, and Adidas, the Germanshoemaker, had about 8 to 9 percent.

But after seeing its revenues double yearly, and itsshare of the $2 billion athletic shoe market grow to 35percent, Nike believed the end of that growth, or atleast the beginning of the end, was in sight.


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For one thing, nearly everyone who was going torun or jog, probably already had begun.

More seriously for marketers of running gear,many runners had quit running or cut down ontheir distances.

Although the fitness craze that began in the early1970's showed few signs of decline, many fitnessbuffs had begun to take up other activitiesbesides running--including walking, weighttraining, Nautilus, aerobics, racquetball,basketball, etc.


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Faced with a mature market in its running shoe market, Nike didwhat many companies do in similar circumstances --they diversified into other related products.

Nike began marketing sports clothes, shoes for other activitiesbesides running (e.g., aerobics, court shoes for handball and

racquetball, basketball shoes). This brought them into markets that they had less experience with

(where Nike did not have a deep understanding of theconsumer/product relationship).

Moreover, many of these markets (clothing) endured faddish trendsand were even more volatile than running shoes.

More recently, Nike created the Outdoor Division to create hikingoriented sneakers, sandals, and boots.


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Through increasing competition, controversysurrounding its overseas labor practices, andconstantly changing markets, Nike has built one

of the strongest brands in the world. The familiar Nike swoosh is laden with symbolic

meanings that deeply connect with consumers.

They have successfully expanded into new sports,

including golf. and continue to dominate their industry, but

must remain diligent to a very dynamic market.


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Q 1

(a) Students should be able to imagine and draw possible

means-end chains possessed by serious competitors inspecific sports in contrast to people who buy and use someof the equipment for those sports (shoes, for example) butseldom participate in the sport.

The values of sport participants are likely to focus onperformance and achievement in the sport.

They are likely to have specialized means-end knowledgeabout product attributes and their consequences.

Shoes with attributes that are seen as instrumental inachieving important consequences and goals will bedesirable.


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People who do not participate in the athletic activityare likely to have rather different types of end goalsand values, perhaps including status, recognition byothers, and "fitting in."

Some end values may be the same for these twogroups of consumers--e.g., self-esteem.

But the means-end chain that links the productattributes to the self-relevant end might be quitedifferent.

It is quite likely that the same product will havedifferent meanings for these two consumergroups/segments.


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Q 1 (b)

Students should be able to draw coherent

means-end chains that represent key

meanings for each segment.


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Q 1

Developing marketing strategies to appeal totwo different consumer segments can bedifficult (e.g., avid

wilderness hikers and mall crawlers who wearhiking boots).

Marketers should carefully analyze thecustomer-product relationship in each targetsegment and develop promotion strategiesthat are appropriate for each one.


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In addition, students should mention problems of

reaching each group efficiently so there is

minimal spillover of each promotion strategy to

the other group. Advertising in enthusiast magazines (Runners'

World; Self; Woman's Sports & Fitness) may be

effective ways to reach the sports participant. The casual user would be more difficult to target

efficiently


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Q 2

This is essentially an ethics related question designedto get students to think about ethical issues inmarketing.

Marketing has been frequently criticized as being

entirely unnecessary to the process of providing goodsto consumers.

Critics have argued that marketing and advertising addcosts that ultimately the consumer has to bear.

Ask students what they think about this point of view.

It should be a lively discussion depending on thedistribution of marketing and non-marketing majors inthe class.


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Q 3

From the late 80s on through the early 21st century, much of thecompetition in the athletic shoe market focused on technologicalinnovations of various types. These high-tech attributes included the NikeAir system (small chambers of air in the sole to cushion impact).

Students should recognize that none of these product attributes havemuch meaning for the consumer until they understand the personal, self-

relevantmeaningful linkages that consumers construct between product attributesand functional and psychosocial benefits, and perhaps even values.

The constant flow of new models and attributes only increases theamount of information being thrown at the consumer that he or she thenneeds to make sense of.

While the new introductions certainly add to the image of a company thatis constantly innovating and keeping at the crest of technology, it alsomeans that consumers may have an information overload when they go topurchase a pair of shoes and may be forced to rely on previousexperiences or word -of-mouth to decide.


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Q 4

Creating a connection with the consumer, as asource of customer loyalty and for developingfavorable brand attitudes, has long beenconsidered by marketing and advertising

practitioners, albeit sometimes in anunstructured form.

Recent research on involvement, brand equity,and especially on measurement of the meanings

created for consumers through means-endchains, has given an analytic framework forfurthering this understanding.


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The objective of many brands is to establish a

relationship with consumers and to link the

brand with consumers end goals,

transcending just functional benefits.

This becomes important in categories when

functional or physical benefits cannot

sufficiently distinguish one brand fromanother.


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Q 5

Nike decided that its logo had become tooprominent, to the point of becoming pass.Moreover, younger consumers viewed the

swoosh as something of a relic, an uncool,outdated symbol of the past.

The company believed that by using theswoosh more selectively, the company couldhelp the logo regain some of the power itmight have lost in the minds of consumers.


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Q 6

Many consumers in the alternative market

have somewhat different means-end chains

for shoes than consumers who buy Nikes

basketball shoes.

While a basketball player might want to buy

Nike shoes because of the brands reputation,

a mountain biker might avoid Nikes becausethey are too mainstream.


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Because of this, Nikes brand equity could be a

positive or a negative as it expands its productline.

Alternative consumers might respect Nikesreputation for quality, but might also be wary ofits corporate image or widespread popularity.

The Nike swoosh and name likely carry different

meanings for a white, suburban skateboarderthan they do for a young, African-Americanbasketball player living in an inner city.


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Nikes tradition of emphasizing performance

might or might not work with its ACG brandedshoes.

Alternative consumers may be looking less atperformance and more at how their shoesproject a certain lifestyle image.

These people might cast a cynical eye toward the

big-budget, hype-filled ads that helped Nikeattain success with its basketball and runningshoes.


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Q 7

This question takes students back to the keyconcept of involvement, discussed in this chapter.Note that involvement is having personalrelevance. This can happen because of reasons

intrinsic to the consumer. For example, consumers may be interested in

running or basketball as a sport.

It can also be created through situational factors

like a sales promotion, celebrity endorsement, orcurrent fad where the consumer is motivatedby factors other than the activity or the brand.


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Students are asked to distinguish between these two typesof involvement and to reflect on which is more beneficialfor the brand.

Further, note that most brands have a mix of consumersranging from the intrinsically involved to the situationalinvolved.

Clearly, brands need to cater to both these groups andneed to address them differently.

Ask students to take examples of products that they are

involved with and those that they are not involved with tohighlight differences between them.

Ask them to speculate what sorts of appeals would workfor them as consumers in each of these different situations


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CB Kabhi B

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