Group 5 Nike-I

7/27/2019 Group 5 Nike-I

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Table of contents

Executive Summary 2 History of Nike 3

Qualitative Research Model Laddering 6

Research Methodology 9

Quantitative Research Model BAV 10

Questionnaire 11

Analysis 15

Findings and Conclusions 19


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Executive Summary

Nike, Inc. is an American multinational manufacturing company. Their core products include

footwear and athletic apparel. The company was founded on January 25, 1964 as Blue

Ribbon Sports by Bill Bowerman and Phil Knight. Nike stands as the world leader in athleticshoes.

The company rose quickly from small-time sales at track meets, to a major publicly-traded

Fortune 500 company. The company went public in the 1980's and Nike successfully profited

50% of the market share in the United States. Throughout its history and background, Nike

has utilized strong advertising campaigns to separate itself from its competition. Two of the

most memorable marketing campaigns, "Just Do It" and the Air Jordan brand, cemented

Nike as one of the most popular shoe brands in the world.

Today, Nike is one of the biggest transnational co-operations in the world. They have a widevariety of products to sell which they make in factories all over the world. Nike's first

products were track running shoes. They now make shoes, jerseys, shorts and get

equipment for a wide range of sports including track & field, tennis, baseball, football, ice

hockey, basketball and cricket, running, golf, cross training, cycling, volleyball, wrestling,

cheerleading, aquatic activities etc.

In the first phase of the project, we attempt to develop a Quantitative Research Model to

test the current status of the brand Nike using the Brand Asset Valuator Model developed

by Young & Rubicam while the Laddering Method was employed to determine the brandidentity.

The BAV model measures the brand along 4 dimensions namely Differentiation, Relevance,

Esteem and Knowledge. Differentiation and Relevance together comprise the Brand Strength

while Esteem and Knowledge build up the Brand Stature. For the BAV analysis, a simple

sample of 29 was surveyed using a questionnaire.

On the BAV grid, Nike lies on the leadership category which shows that it has high earnings

and high growth potential but the only cause of concern if any, is the comparatively low

differentiation score which shows that Nikes servings are replicated by its competitors too.

The laddering method was used as a Qualitative research tool to gauge the brand identity of

Nike. A sample of 7 respondents was chosen for this process. The laddering technique

provides a systematic way of understanding an individuals core set of values and how

powerful Nikes product offerings relate to these constructs. This technique identified that

Nike as a brand for the sporting aficionado that promises satisfaction, comfort, self-

esteem and provides value for money. Watch the ensured performance and pride

delivered as Nike just does it!


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History of Nike

Nike, as the world knows it now, was originally founded as Blue Ribbon Sports (BRS) by

University of Oregon track athlete Philip Knight and his coach Bill Bowerman in January

1964. The company in its initial days, operated as a distributor for Japanese shoe maker

Onitsuka (now ASICS).

In 1966, BRS opened its first retail store and in 1971, BRS launched its own line of footwear

which bore the Swoosh which was newly designed by Carolyn Davidson. The company

officially changed its name to Nike on May 30th

1978.

The first brand ad for Nike, called "There is no finish line," in which no Nike product was

shown came in 1977. The onset of the year 1980 saw Nike take a 50% market share in the

U.S. athletic shoe market, and the company went public in December of that year.

It was Wieden+Kennedy ad agency co-founder Dan Wieden who coined the now-famous

slogan Justdo it for a 1988 Nike ad campaign. This ad was chosen by Advertising Age as

one of the top five ad slogans of the 20th century. Nikes product line was rapidly expanding

to encompass many sports and regions across the globe in 80s.

Products

Nike produces a host of sports equipment and apparel. Their first product was track running

shoes. They currently make shoes, jerseys, shorts etc. for a wide range of sports, including

track and field, baseball, tennis, soccer, basketball, and cricket.

Nike is well known and popular in youth culture, and hip hop culture for their supplying

of urban fashion clothing. Nike recently teamed up with Apple to produce the Nike+, a

product that monitors a runner's performance via a radio device in the shoe that links to

the iPod Nano.

Nike is known for disruptive innovation and is currently the world no. 1 in sports goods.


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Evolution over time

Nike's Corporate Mission Statement:

'To be the world's leading sports and Fitness Company.'

Key Dates:

1962: Philip H. Knight founds Blue Ribbon Sports (BRS) to import Japanese running shoes.

1963: BRS takes its first delivery of 200 shoes from Onitsuka Tiger Co.

1964: BRS becomes partnership between Knight and William Bowerman.

1966: The Companys first retail outlet opens.

1968: Company is incorporated; the Bowerman-designed Cortez shoe becomes a big seller.

1971: BRS begins manufacturing its own products overseas, through subcontractors; the

Swoosh trademark and the Nike brand are introduced.

1972: At the 1972 U.S. Olympic Trials, the Nike brand is promoted for the first time;

company enters its first foreign market, Canada.

1978: Company changes its name to Nike, Inc.

1979: First line of clothing is launched and the Nike Air shoe cushioning device debuts.

1980: Nike goes public.

1981: Nike International, Ltd. is created to spearhead overseas push.

1985: Company signs Michael Jordan to endorse a version of its Air shoe--the 'Air Jordan.'

1988: Cole Haan, maker of casual and dress shoes, is acquired; 'Just Do It' slogan debuts.

1990: First Nike Town retail outlet opens in Portland, Oregon.

1991: Revenues reach $3 billion.

1994: Company acquires Canstar Sports Inc., the leading maker of skates and hockey

equipment in the world, later renamed Bauer Nike Hockey Inc.

1995: Company signs golfer Tiger Woods to a 20-year, $40 million endorsement deal.

1996: The Nike equipment division is created.

1999: Company begins selling its products directly to consumers via its web site.

2000:Present: Secret Tournament incorporated advertising, the Internet, public relations,

retail and consumer events which become the cornerstone for Nike marketing and

communications.


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2012:Nike expands in new ways, including strong growth in China and a deal to become the

official sponsor of the National Football League (NFL)

2013: Nike, Inc. announced an increase to its fiscal 2015 revenue target to a new range of

$28-30 billion, up from its previous target of $27 billion announced in May 2010. The

company also increased its fiscal 2015 revenue target for the NIKE Brand to $24-25 billion,

up from its previous target of $23 billion.


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Qualitative Method

Reynolds and Gutmans Laddering Method

Thomas J Reynolds and Jonathan Gutman developed and introduced laddering in 1988,

based on Gutmans Means-End Theory of 1982. They described product attributes,

consequences, and values. Product attributes produce consequences that produce personal

meaning for product users.

We mean to say is that the product functional and emotional benefits, which are personal to

the product users. Study also shows that people buy features and benefits only when their

emotions and beliefs are satisfied.

There are four levels to the features-benefits-emotions chain. These are as follows:

1. Features2. Functional benefits3. Higher Order benefits4. Emotional benefits

Each one these levels are linked to each other. All the levels are important in understanding

why people buy a product or a service.

The feature is specific, it helps performs a specific job.

The functional benefit is tangible and it is the outcome of the features.

The higher order benefits are what the functional benefit delivers.

The emotional benefit satisfies feelings and beliefs. We have learnt that emotions drive

wants or needs.

The process of laddering

The process of laddering is all about asking questions to individuals. We start with asking our

respondents about the feature of the product. When you get an answer you further ask

them about the functional benefits next you ask them about higher order benefits of thefunctional benefits. By this way the why questions go ahead.


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We should make sure not to ask a why directly but to ask the questions in a roundabout

manner.

Laddering works well with using depth interviews. It helps in getting in depth and privacy.

We have also used laddering for our brand Nike. We have done laddering on 7 people.

Laddering findings and suggestions

Some of respondents weremotivated by the tag line of Nike

which is Just do it. The brand

ambassador and also the wide

acceptance it has give them a good

feeling which also boosts their self-

esteem.

The respondents showed the

quality factor in the shoes gave

their feet comfort and helped

them achieve personal

attainment.

The value for money proposition

which they gain by using the shoe

makes them feel happy.

The design, innovative styles of the

shoe and also the latest trends

gives them a boost to their physical

appearance as well as their self

esteem


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The main factors that boost its consumption are its innovative styles, its new designs,

the comfort it gives, the value for money which the consumers get, the catchy tag line

which gives them an adrenaline rush help them in boosting their self-esteem as well as

physical attainment

Strong Benefit Chain: Most of the respondents prefer this

because of the comfort factor they attain from the shoe and

also the value for money. This should be cashed upon.


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Research Methodology

The Brand Asset Valuator model was used to measure the current status of thebrand with reference to its competitors.

An independent questionnaire was designed to understand the customersperception across the 4 pillars namely Differentiation, Relevance, Knowledge and

Esteem, on which the BAV is based.

Weightage of 100% was assigned to each pillar of the BAV model. This weightage was split amongst the questions related to them. Weights are assigned to these questions on the basis of its

significance and its importance to the 4 pillars.

Research Design: A descriptive research was conducted. Research Instrument: Questionnaire Sampling Unit: Users of Different brands of shoes and other sports apparel. Sample Size: 29 Brands used: Nike, Adidas, Reebok, Puma and Asics Calculation:

The calculation was done by adding the number of responses andmultiplying them to the weightage of the question that was allocated

to a particular attribute or a brand.

The process was followed to arrive at a score for each brand. All thescores from the questions pertaining to a specific pillar for a particular

brand were added to get the final score.

Percentage was assigned on the basis of the final score received byeach of the brands.


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Quantitative Method

Young and Rubicams Brand Asset Valuator

The brand image of Nike rests upon the 4 pillars that essentially constitute Young

and Rubicams Brand Asset Valuator. The factors that make up this technique are

Differentiation, Relevance, Esteem and Knowledge.

Differentiation: Is the points of difference associated with a brand with respect to another

brand. Differentiation has 3 components: Different, Unique and Distinctive. Being different

is the ability to stand out from the competition a brand has. Uniqueness is the brands

essence, beliefs and personality. Distinctiveness helps a brand to climb up the premiumpedestal.

Relevance: Is the factor that makes or breaks the attraction of a customer towards a brand.

It is the stepping stone towards the brands progression.

Esteem: Is regardedas the extent of a brand being considered as likeable and how it caters

to the promised values to its customers. Esteem depends on perceptions of quality and

popularity.

Relevance and differentiation make up the brand strength.

Knowledge: Means how the consumer knows what the brand is and what the brand stands

for.


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Questionnaire

1) Age1) < 20 2) 20-29 3) 30-39 4) 40-49 5) >50

2) Gender M/F3) Which brands come to your mind when you think of sportswear? (Brand knowledge)

-------------------------

4) When it comes to sports apparel which one of these brands will you recommend? (BrandRelevance)

1. Puma 2.Nike 3.Reebok 4. Adidas 5. Asics

5) Please rate the following brands.1=Strongly Agree 2=Agree 3=Neither Agree/nor disagree 4=Disagree

5=Strongly Disagree

A. I think understated brand is a trustworthy brand. (Brand esteem)Strongly

Agree

Agree Neither

agree nor

disagree

Disagree Strongly

agree

PumaNike

Reebok

Adidas

Asics

B. The quality of the understated brand is the best. (Brand esteem)Strongly

Agree

Agree Neither

agree nordisagree

Disagree Strongly

agree

Puma

Nike

Reebok

Adidas

Asics

C. I think understated brand has a unique personality. (Brand differentiation)Strongly Agree Neither Disagree Strongly


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Agree agree nor

disagree

agree

Puma

Nike

Reebok

Adidas

Asics

6) The following factors are important to you while buying sports apparel. Please rank themaccording to their importance with rank 1 being highest important and rank 5 being least

important. (Brand Relevance)

1. Comfort 2.Trendiness 3. Price 4. Design 5. Durability

7) Please rate the following brands.1=Strongly Agree 2=Agree 3=neither Agree/nor disagree 4=Disagree

5=Strongly Disagree

A. I think the understated brand is comfortable.Strongly

agree

Agree Neither

agree nor

disagree

Disagree Strongly

agree

Puma

NikeReebok

Adidas

Asics

B. I think the understated brand is Trendy.Strongly

Agree

Agree Neither

agree nor

disagree

Disagree Strongly

agree

Puma

Nike

Reebok

Adidas

Asics

C. I think the understated brand is correctly priced.Strongly

Agree

Agree Neither

agree nor

Disagree Strongly

agree


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disagree

Puma

Nike

Reebok

Adidas

Asics

D. I think the understated brand has good Design.Strongly

Agree

Agree Neither

agree nor

disagree

Disagree Strongly

agree

Puma

Nike

ReebokAdidas

Asics

I think the understated brand is Durable.

Strongly

Agree

Agree Neither

agree nor

disagree

Disagree Strongly

agree

PumaNike

Reebok

Adidas

Asics

8) Please rate the following brands.1=Strongly Agree 2=Agree 3=Neither Agree/nor disagree

4=Disagree 5=Strongly Disagree

A. I think the understated brand conveys a powerful meaning. (Brand differentiation)Strongly

Agree

Agree Neither

agree nor

disagree

Disagree Strongly

agree

Puma

Nike

Reebok

Adidas

Asics

B. I think the understated brand is popular. (Brand esteem)


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Strongly

Agree

Agree Neither

agree nor

disagree

Disagree Strongly

agree

Puma

Nike

Reebok

Adidas

Asics

9) Given the list of traits : Individuality, spontaneity, victory, taking up challenges andperformance. Which brand would you associate with which trait? (Brand knowledge)

1. Puma ------------------

2. Nike ------------------

3. Reebok ------------------

4. Adidas ------------------

5. Asics ------------------


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Analysis

For the brand Puma, we find that the Differentiation is marginally lesser thanRelevance i.e. DK .This

is a healthy pattern as the customers will start to learn more about the brand.

This is because they will have more motivation to find out the brand they are using.

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Puma Adidas Asics Reebok Nike

Esteem

Relevance

Differentiation

Knowledge

21% 21.50% 21%16.67%

0%5%

10%15%20%25%

Puma

Puma


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D>R implies that consumers perceive the brand to have a unique meaning but withroom for more relevance in their lives.

E>K implies that Reebok is better liked than known. So consumers will have moremotivation to find out about the brand.

Reebok is very low on knowledge and esteem. Comparatively, it has higher relevanceand differentiation.

Reebok has greater brand strength than brand stature. Brand Strength allows thebrand to both defend itself from competition and generate margin, earnings and

economic value.

Nike, as a brand is the market leader. For Nike, differentiation is lesser than relevance which means that Nike has lost its

uniqueness.

This is due to the fact that market competition is fierce and the presence of largenumber of players. Nike follows competitive pricing; hence people have an incentive

to buy.

18% 18.80%19%

12.37%

0%

5%

10%

15%

20%

Esteem Relevance Differentiation Knowledge

Reebok

Reebok

24% 23.76% 23%

43.01%

0%

10%

20%

30%

40%

50%


Nike

Nike


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Nike is better known than liked which can be inferred from the point of esteembeing lesser than knowledge.

Adidas has successfully built on Esteem and Differentiation. The brand's highest pillar is Esteem which shows that itfulfilsitsimplied or overtly

stated consumer promise and is a highly regarded and respected brand. E>K

The brand is well distinguished from others but consumers have not understood andinternalized what the brand stands for. i.e. D>R

Analysing the Relevance and Differentiation for the brand ASICS we find that there ishardly any difference among the two.

But, the Relevance parameter is slightly better than the differentiation parameteri.e. R>D. This brand is somewhat similar to that of Reebok.

There is not much uniqueness in the Brand and Price plays an important role in thepurchase decision. However the brand has some room for growth.

0%

5%

10%

15%

20%

25%


Adidas

Adidas

14% 15.04% 15%

9.14%

0%

5%

10%

15%

20%


Asics

Asics


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Similarly now comparing the Esteem and Knowledge parameters for the brandPUMA we find that the Esteem Parameter is much better than the Knowledge

Parameter i.e. E>K.

This shows that there is a lot of scope for the customers to learn about the brandthey are using and have more drive to find out the brand they are using.

B

RA

N

D

S

T

R

E

N

GT

H

B R A N D S T A T U R E

Leadership

New

Niche

Declining

Eroding

Unfocused


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Findings and Conclusions

From our analysis we can conclude the following:

Brand Knowledge In terms of brand knowledge, Nike has the highest among all brands

with about 43.01%. Hence, the users of sportswear have very good knowledge about Nike.

Brand Esteem Nike has an esteem value of about 24%. This is the highest among all

brands evaluated. So it is a highly regarded and well respected brand.

Brand RelevanceNikes brand relevance is 23.76% which indicates a greater relevance

compared with other brands. Relevance is the most important building block for any brand

and Nike has the highest relevance so the brand is in a very safe position in the market.

Brand DifferentiationNike has the highest differentiation among other brands which

proves that it is able to differentiate itself from other brands.

Group 5 Nike-I

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