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Proposal for Nike Dri-FIT Market Research

Prepared for: Harjeet Singh ``

Contents Executive Summary.....................................................................................................................................2 Background.................................................................................................................................................3 Problem Definition......................................................................................................................................4 Problem Definition......................................................................................................................................4 Our Research Methodologies.....................................................................................................................4 Our Approach:.............................................................................................................................................4 Our Approach..............................................................................................................................................5 Rationale:................................................................................................................................................5 Research Design..........................................................................................................................................5 Who, What, Where, When and Why?.....................................................................................................5 Research Design..........................................................................................................................................6 Research Design: Store Audit......................................................................................................................6 Rationale:................................................................................................................................................6 Research Design: Focus Group....................................................................................................................7 Research Design: Questionnaire.................................................................................................................7 Rationale:................................................................................................................................................7 Data Collection............................................................................................................................................8 Data Analysis...............................................................................................................................................9 Analysis will allow us to measure perception and attitudes..................................................................10 Analysis will allow us to measure purchase interest..............................................................................10 Data Analysis:............................................................................................................................................11 Reporting.................................................................................................................................................. 11 Timing.......................................................................................................................................................11 References.................................................................................................................................................12

Executive Summary This proposal responds to your brief of June 15 2009 and describes: Business Objective: – to change, reinvigorate or phase out the Dri-FIT range of products Research Objective:

– to assess if consumers are aware of the brand and the media communications. – to assess if consumers are familiar with the technology and consider it important. – to understand purchase interest across different price points and evaluate spend potential. – to assess consumer preferences to designs, colours and materials. – to evaluate in store distribution, visibility and availability. Our Recommended Approach: Store Audit: Visit stores to assess what are the barriers to purchase (poor visibility, limited availability and knowledge of sales staff) Qualitative: Conduct focus groups with user groups to explore reactions to the brand, the designs and media communication material. Quantitative: Conduct questionnaires outside stores to measure awareness of the brand and media communication material and to assess interest at current and alternative price points. Sample Composition: n=300 Questionnaire / n=8 Interviews with Store Managers / n=5 Focus Groups Timing: 10 weeks from project confirmation

Background Nike was established in 1971 and is a global marketer of athletic footwear, apparel and equipment. It’s swoosh logo and‘Just Do It’ slogan have motivated millions all over the world (Malhotra, 2007: 404-405). Consumers receive information from different media sources and make good use of it to collect product information of their preferred products (Schiffnan et al., 2005). Because consumer knowledge of products and competitive products affect the consumption decision-making process (Schiffnan et al., 2005), media can be considered the most effective channel to distribute product information (Ramaswamy, 2008). Consumers’ consumption behavior is affected by their brand knowledge and personality (Kay, 2006: Schiffman et al., 2005), it is recommended that Nike Inc. understand consumers by analyzing the relationship between consumer psychology and product characteristic (Schiffman et al.,2005). The market for sports apparel is becoming increasingly competitive. The model developed by Phil Knight (high value branded product manufactured at a low cost) is now commonly used and to an extent it is no longer a basis for sustainable competitive advantage. Competitors are developing alternative brands to take away Nikes market share. The Dri-FIT range has not been meeting projected sales targets in the Asia-Pacific region. We have been commissioned by the brand manager to conduct market research in Hong Kong, Shanghai and Sydney. We will measure all aspects of the marketing mix and provide valuable information to support the management decision to reinvigorate, change, or phase out the Dri-FIT range.

Problem Definition Research is the systematic collection and analysis of information which helps to improve the quality of planning and decision making. It helps marketers to fully understand what consumers want and can be used to explain and predict attitudes and behavior of the population (Malhotra, 2007: 7-9).Nike Inc. is conducting market research to review the business case from the consumers’ point of view. The research will be used to establish whether (1) theDri-FIT range is sufficiently market-focused (2) marketing plans and planning process are deficient and (3) brand building and communications are weak(Kotler, 2004: 20).

Problem Definition The objectives of this research study are:     

To assess if consumers are aware of the brand and its media communications. To assess if consumers are familiar with the technology and consider it important. To understand purchase interest across different price points and evaluate spend potential. To assess consumer preferences to designs, colors and materials. To evaluate in store distribution, visibility and availability.

Our Research Methodologies

Our Approach: We recommend a three-phase approach: Store Audit and store manager interviews: Depth interviews are a direct way of obtaining information to illustrate a number of specific issues. Our store audit and interviews will be conducted on a one-on-one

basis to uncover beliefs and attitudes about the brand and reveal any underlying or hidden information that we can test quantifiably with further research (Malhotra, 2007:158-162). Qualitative: Our focus groups will be conducted by a qualified research moderator and consist of eight (8) respondents. It will provide deeper understanding of why and how products are chosen and purchased (Malhotra, 2007:145-155). Quantitative: This research will measure consumer awareness, interest across current and different price points and reactions to media communications. Our well designed questionnaires are easy to complete and offer a direct comparability of responses. Questionnaires will be completed by consumers as they exit the store (Malhotra, 2007:187-189).

Our Approach The research variables include:       

3 different markets (Hong Kong, Sydney and Shanghai) 8 stores to be visited in each city Sex of respondents Age of respondents Various levels of brand awareness Understanding of technology Time of study conducted

Rationale: To link the consumer to you through the collection of data/information. In doing so you will be able to gain valuable insight into the consumer and define opportunities or problems to support your management decisions. Using proven research methods we will explore and measure all aspects of the marketing mix (Malhotra, 2007: 8-11). Product

Price

Promotion

Place

Is the current range appealing? Do you need to introduce new designs?

Is the price competitive? Are consumers shopping around for a better deal? Can you compete?

Are you connecting to the most valuable

Do you have good visibility in store?

users? Are you communicating the benefits clearly?

Are you in the right store?

Research Design Who, What, Where, When and Why? Our research design is the framework of our market research proposal. It defines the information needed to conduct the research and how we propose to obtain it (Malhotra, 2007: 78). Store Audit Barriers to Purchase Assess barriers to purchase Assess the styles available Assess the knowledge of sales staff

Qualitative Research Consumer Understanding Understand core target consumer groups’ interest in the brand, and more importantly their perception / attitude

Quantitative Research Brand Test Measure awareness of the brand and media communication material Measure consumer reaction to

Assess media communications

towards it. Understand the pre-defined core material target consumer’s lifestyle and attitude to fitness. Understand the triggers that lead to purchase

the brand and the media communication Measure consumer interest at current and different price points

Research Design Who, What, Where, When and Why?

Store Audit Barriers to Purchase Valuable Users What they know about the brand? Do they understand the benefits? Are they able to communicate benefits to customers? How visible is the brand in store? How do they rate Dry-FIT What is the competition? What are the best sellers? Why are they the best sellers?

Qualitative Research Consumer Understanding Valuable Users What sport do they do? Which are the most wearable? What do they like about the advertisements? What do they wear? What is important? Which brands do they use? Why do they use them? Which have the best designs?

Quantitative Research Brand Test Valuable Users Level of brand awareness? Level of Interest in the brand? Perception of the brand? Likelihood to buy at current and different price points? Attractive Attributes of the brand? Level of agreement with media communication? Is current marketing successful?

Research Design: Store Audit Rationale: Store audits are a good way to assess the barriers to purchase i.e. poor visibility, limited availability and sales knowledge. Our experienced staff will record their systematic observations and conduct depth interviews with store managers. This method is very effective in revealing any underlying or hidden information (Malhotra, 2007:159). The criteria for the respondents are: Store Manager & Staff

Length of interviews: 30 minutes Selection Stores will be selected in high traffic areas

Research Design: Focus Group Rationale: Focus groups are proposed because they are a time and cost-effective way to explore various issues. This method provides an environment in which you have direct contact with consumers allowing you to understand the behavior and thinking of the respondents as individuals. The group dynamic is very effective as it encourages people to think and speak and build on each other’s ideas. This prequantitative preparation will provide insight for our questionnaire design (Malhotra, 2007:145-155, Rosenberger, 1996:1-13 & Morgan 1993: 3-19). The criteria for the respondents are:

Length of interviews

Aged 18 – 50

Approximately 120 minutes

Athlete / Athletic Participant / Consumer

Recruitment

8 x Respondents per group

All respondents are screened to ensure suitability

Research Design: Questionnaire Rationale: The key objective of this questionnaire is to understand consumer awareness, behavior and perception towards the brand and their acceptance at different price points. This questionnaire shall be conducted outside stores in high traffic areas. The method will provide a representative sample of the population (Malhotra, 2007:296-322 & Williamson et al., 2000: 235-249). Length of interviews: The criteria for respondents: Aged 18 – 50 Athlete / Athletic Participant / Consumer

Approximately 15 minutes Recruitment As customer’s exits store Questionnaire screens respondents to ensure suitability

Data Collection  Design of questionnaires and subsequent analysis will be conducted by a senior research director (Malhotra, 2007:305-306).  Experienced moderators will be responsible for facilitating the focus group discussions and store visits, conducting store audits and interviewing staff and store managers(Malhotra, 2007:145 & 158).  Focus groups will take place in a viewing studio allowing the client to view/attend (Malhotra, 2007:147).  All materials will be agreed and signed off with the client before proceeding - crucially sample design, questionnaire and recruitment specs (Malhotra, 2007: 300-301).  Fully trained professional interviewers will be conducting the store exit interviews. Quotas and progress will be monitored by a fieldwork manager or supervisor (Malhotra, 2007: 413-418).  A proportion of the interviews will be back checked i.e. respondents re-contacted and confirmation of the interview and key information provided in interview made (Malhotra, 2007: 305-306).  Interviewers will use PDA to input questions and additional data entry. The questionnaire will be scripted onto the PDA and routing done automatically to avoid interviewer errors. The program will be tested before going to field (Malhotra, 2007: 419).

Data Analysis Analysis will allow us to measure purchase

Analysis will allow us to measure perception and attitudes

Analysis will allow us to measure purchase interest Research will identify the segments with greatest purchase intention

Data Analysis: The tool we will use to analyze the relationship between the independent and dependent variables is cross-tabulation (Malhotra, 2007: 468). Our rationale for using this method:  Cross tabulations are easy to interpret and understand.  They can be used with any level of data: nominal, ordinal, interval, or ratio.  A table can provide greater insight than single statistics.  It solves the problem of empty or sparse cells.

Reporting The research deliverables are:  One PowerPoint research report covering:  Store Audit findings  Qualitative in-depth research findings  Quantitative questionnaire research findings Following supports are expected from Nike:  Stimulus materials to introduce the store and the product  Advisory input in developing attributes or answer options used in the questionnaire

Timing A total of 10 weeks are required to deliver the final research output.

References Alreck, P.L. and Settle, R.B. (1999) Strategies for building consumer brand preference, The Journal of Product & Brand Management,Vol 8, No 2, pp 130-144, viewed 13 June 2009 http://www.emeraldinsight.com Francis, G. (2007) Introduction to SPSS for Windows, v15.0 and 14.0, Pearson Education Australia Kay, M. J. (2006) Strong brands and corporate brands, European Journal of Marketing, Vol 40, No 7/8, pp 742-760, viewed 13 June2009 http://www.emeraldinsight.com Kotler, P. (2004) Ten Deadly Marketing Sins: Signs and Solutions, John Wiley & Sons, New Jersey, pp 20, ISBN: 978-0-471-66206-8 Malhorta, N. K. (2007) Marketing Research: An Applied Orientation 5th Edition, New Jersey, Pearson Prentice Hall....