1. Read the following case and answer the relatedquestions:
Nike is the largest seller of athletic footwear, athletic apparel,and other athletic gear in the world, with
about 25 percent market share worldwide. It focuses on NIKE Brandand Brand Jordan product
offerings in seven key categories: running, basketball, football,men’s training, women’s training, NIKE
sportswear, and action sports. The company sells its productsthrough a mix of independent distributors,
licensees, and subsidiaries in approximately 120 countriesworldwide. Nike has grown from an $8,000
company in 1963 to a company with revenues of $34.4 billion for theyear ended May 31, 2017.
In 2016, Nike spent an enormous amount of money. Nike’s sponsorshipand endorsement commitments
amounted to $6.2 billion in 2016, up 32% from 2015. In order tomake sure that this money is being
spent properly, Nike relies on marketing research. It has shown ahistory of innovation and inspiration
in its marketing and is quick to adapt to the changing consumer andthe world of sports. Nike has used
marketing research in understanding where future growth lies. Arecent example is Nike’s shift from
marketing in the more traditional sports (basketball and running)to other sports (golf and soccer), where
it has not been as strong. Marketing research surveys revealed thatthe awareness of Nike among soccer
and golf players was low, and Nike decided to work on increasingthese numbers. Nike has decided that
the money needed for licenses in its strong areas can be betterspent in other areas where Nike does not
have brand awareness.
Today, the Nike Swoosh is recognized around the world. This is theresult of more than 40 years of
work and innovation. It signed the first athletes to wear its shoesin 1973. Early on, Nike realized the
importance of associating athletes with its products. Thepartnerships help relate the excellence of the
athlete with the perception of the brand. Through focus groups andsurveys, Nike discovered the
pyramid influence, which shows that the mass market can beinfluenced by the preferences of a small
group of top athletes. After it realized this effect, Nike began tospend millions on celebrity
endorsements. The association with the athlete also helpsdimensionalize the company and what it
believes in. With Nike, this was, and remains, extremely important.It wants to convey a message that
the company’s goal is to bring innovation to every athlete in theworld. Nike also uses athletes to design
new products by attempting to meet their individual goals.Explaining Nike’s strategy of celebrity
endorsements, Trevor Edwards, vice president of U.S. BrandManagement, says that the sports figures,
such as Ronaldo, Michael Jordan, and Tiger Woods, who have endorsedNike brands, all have
represented excellence in some way. Nevertheless, the athletes alsohave a personal side, such as their
drive to win or their ability to remain humble. All these qualitiesspeak something about the Nike brand;
this not only benefits the brand but also helps to define what theNike brand is and what it stands for.
The company also realized that in order to achieve its lofty growthgoals, it must appeal to multiple
market segments. Based on marketing research, Nike divided themarket into three different groups: the
ultimate athlete, the athletics participant, and the consumer whois influenced by sports culture. The
first segment is the professional athletes. The second constituencyis the participants, those who
participate in sports and athletic activities but do not seethemselves as athletes or as being part of the
larger sport. The third segment comprises those who influenceothers and are influenced by the world
of sports. These three different constituencies form threedifferent consumer segments, and Nike uses
very different strategies for each.
Nike has always been an aggressive user of marketing research andthis has been shown in its attack on
the European market. It decided to concentrate on different sportsin order to reach European
consumers. Americans love baseball. And football. And basketball.But Europe’s favorite game is
soccer. Nike placed its focus on major sporting events (World Cupsand Olympics) and
celebrity athletes that are relevant to the European consumer.Marketing research in the form of focus
groups and survey research revealed that the best positioning forNike shoes was one that enhanced
performance in the sport. Through massive advertising campaigns, ithas been able to change
the perception of its products from fashion to performance, and inthe process increase sales
dramatically.
Another technique Nike has used is to specifically design a productline for a certain market. Nike uses
marketing research to determine the lifestyles and product usagecharacteristics of a particular market
segment and then designs products for that segment. An example isthe Presto line, which was designed
for a certain youth lifestyle. Nike focused on the lifestyle anddesigned the products around this group.
It also used marketing research to determine the most effectivemedia to communicate with the target
market.
Nike launched its “Write The Future” Campaign in 2010 that madeextensive use of social media in
partnerships with YouTube, QQ.com, and Facebook. It celebratedfootball’s pivotal moments and
allows fans around the world to connect with their heroes. Itfeatured an action-packed film that brought
together some of the world’s greatest players to inspire footballlovers and sports fans around the world.
Footballers could then use this creative to build their ownFacebook campaign and be eligible for
rewards.
Because of these methods, the Nike logo is recognized by 97 percentof U.S. citizens, and its sales have
soared as a result. However, Nike faces a new concern: that it haslost its traditional image of being a
smaller, innovative company. It also faces future obstacles inmaintaining brand equity and brand
meaning. Continued reliance on marketing research will help Nike tomeet these challenges, associate
its brand with top athletes and performance, and enhance itsimage.
Conclusion
Nike used marketing research to build its brand into one of themost well-known and easily recognized
brands in the world. Nike’s strategy of celebrity endorsements, itsexpansion into Europe, and the
resulting stronger association with soccer are some of the stepstaken by Nike to grow its brand. In the
coming years, as Nike expands to newer markets and capitalizesnewer opportunities, it will have to
continue its reliance on marketing research and continue toassociate athletes, performance, and the
brand.

Case Related Questions:
a) Nike would like to increase its share of the athletic shoemarket. Define the managementdecision
problem (MDP).
b) Define an appropriate marketing research problem (MRP) andrelated research questions (RQs)
corresponding to the management-decision problem you haveidentified. (1+5 marks)
c) How can qualitative research be used to strengthen Nike’s image?Which qualitative research
technique(s) should be used, and why?