Proposal for

Nike Dri-FIT

Market Research

Prepared for: Alison Dean

June 14, 2009

Table of Content

Executive Summary

Background

Problem Definition

Research Design

Fieldwork Data Collection

Data Analysis

Reporting

Timing

Appendices

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 behaviour 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 Nike's 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.

Background

Problem Definition

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 behaviour 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) the

Dri-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, colours and materials.

To evaluate in store distribution, visibility and availability.

Qualitative Quantitative

Our Research Methodologies

Quantify consumer

behaviour and attitude

Questionnaire

In-depth understanding

of customer behaviour and attitude

Focus Groups

In-Depth Interviews

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).

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

Our Approach

Our Approach

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

users?

Are you

communicating the

benefits clearly?

Do you have good

visibility in store?

Are you in the right

store?

Research Design

Research Design

Store Audit

Barriers to Purchase

Qualitative Research

Consumer Understanding

Quantitative Research

Brand Test

Assess barriers to purchase

Assess the styles available

Assess the knowledge of sales staff

Assess media communications

Understand core target consumer

groups’ interest in the brand, and

more importantly their perception /

attitude towards it.

Understand the pre-defined core

target consumer’s life-style and

attitude to fitness.

Understand the triggers that lead to

purchase

Measure awareness of the brand and

the media communication material

Measure consumer reaction to the

brand and the media communication

material

Measure consumer interest at current

and different price points

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).

Who, What, Where, When and Why?

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?

Valuable Users

What sport do they do?

What do they wear?

What is important?

Which brands do they use?

Why do they use them?

Which have the best designs?

Which are the most wearable?

What do they like about the

advertisements?

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

Barriers to Purchase

Qualitative Research

Consumer Understanding

Quantitative Research

Brand Test

Who, What, Where, When and Why?

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).

Research Design: Store Audit

The criteria for the respondents are:

Store Manager & Staff

Length of interviews:

30 minutes

Selection

Stores will be selected in high traffic areas

Sample attached as an appendix

Hong Kong / Shanghai /Sydney

8 x Stores Interviews will be conducted with store managers

Nike or Outlet Store Stores must keep Dri-FIT range

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 behaviour 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 pre-quantitative

preparation will provide insight for our questionnaire design

(Malhotra, 2007:145-155, Rosenberger, 1996:1-13 & Morgan 1993: 3-19).

Research Design: Focus Group

The criteria for the respondents are:

Aged 18 – 50

Athlete / Athletic Participant / Consumer

8 x Respondents per group

Length of interviews

Approximately 120 minutes

Recruitment

All respondents are screened to ensure suitability

Sample attached as an appendix

Hong Kong / Shanghai /Sydney

Mixed Group

1 x Male / 1 x Female

1 x Male / 1 x Female

1 x Athlete

2 x Athletic Participant

2 x Consumer

Current user of brand

or competitor Minimum 4 respondents in each group

Hong Kong / Shanghai /Sydney

Total sample size

Male & Female N=300

Sample composition

Age 18 – 29

N=100 in each age group (M x 50 / F x 50) Age 30 - 39

Age 40 - 50

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).

The criteria for respondents:

Aged 18 – 50

Athlete / Athletic Participant / Consumer

Length of interviews

Approximately 15 minutes

Recruitment

As customers exits store

Questionnaire screens respondents to ensure suitability

Sample attached as an appendix

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 Collection

All interviews will be conducted in the language of the participants.

Data Analysis

Lifecycle of the Research Project

Meet with Nike Brand Manager to

ensure understanding of objectives,

target consumers and research plan

Store Audit & Develop questionnaire

answer options, decide on which

consumers will take part in discussion

groups and interviews

Hold focus groups and finalise

questionnaire answer options

Fieldwork – Questionnaires

administered

Analyse results – check data and

figures from questionnaires, watch

videos/ transcripts of consumer

groups and interviews

Prepare presentation that answers

client’s objectives and make business

recommendations

100.0

67.0

43.0

38.0

29.0

27.0

26.0

27.0

28.0

25.0

27.0

8.0

17.0

18.0

Dri-FIT is a good brand

I have seen the advertisements

Dri-FIT designs are good

Dri-FIT pricing is competitive

Dri-FIT have the styles I want

Dri-FIT is a fashionable brand

Dri-FIT is suitable for me

Maintenance Potential

Potential: Purchase intention

would be improved if perception

and attitude towards the range

improves.

Maintenance: Concept creates low to

moderate perceptions of ‘Dri-FIT’ as a

fashionable brand.

Analysis will allow us to

measure perception and

attitudes

Total Evaluated

(n=300)

Female

N=150

Aged 18-29

N=50

Analysis will allow us to measure purchase interest

Research will identify the segments with greatest purchase intention

50%

60%

65%

Females aged 18-29 has

purchase intention of 65%

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.

Data Analysis

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

*A workshop to discuss the implications of the findings is optional.

Reporting

Timing

Timing

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

Week No.

TASK 1 2 3 4 5 6 7 8 9 10

Store Audit

Qualitative

- Preparation of research

- Recruitment

- Conduct Focus Group

- Reporting

Quantitative

- Set up, develop questionnaire

- Fieldwork

- Reporting

References

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 June

2009 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.

Morgan, D. (1993) Successful focus groups : advancing the state of the art Chapter 1, pp. 3-19, Sage Publications, Newbury Park, Calif.

Ramaswamy, V. (2008) Co-creating value through customers' experiences: the Nike case, Strategy & Leadership, Vol 36, No 5, pp 9-14,

viewed 13 June 2009 http://www.emeraldinsight.com

Rossenberger, P. J. (1996) Focus Groups: An Introduction for the Uninitiated, pp. 1-15, Department of Management, University of

Newcastle

Shiffman, L., Bednall, D., O’cass, A., Paladino, A. and Kanuk, L. (2005) Consumer Behaviour, 3rd Edn, NSW, Person Education

Australia

Williamson, K. (1989) Research methods for students, academics and professionals: information management and systems, Kirsty 2nd

ed., Chapter 14,2002,pp. 235-249

Appendices