< “MARKETING STRATEGY FOR NIKE SHOES” >

A PROJECT REPORT

Under the guidance

DEVIYANI ROTHAGI

Guide Registration No: - MBADL0009

Submitted by

Ravinder Pal Singh

Registration No: - 1502005762

In partial fulfillment of the requirement

For the award of the degree

Of

MBA

IN

[Finance/ Marketing/ Human Resource Management/Information

System/ Banking/Retail Operations/Operations
Management/Project Management/Total Quality Management
SMU

Sikkim Manipal University

Directorate of Distance Education

<Jan>&<2017>

1
 BONAFIDE CERTIFICATE

Certified that this project report entitled “MARKETING STRATEGY FOR NIKE
SHOES” is the bonafide work of RAVINDER PAL SINGH, REGISTRATION NO:-
1502005762 who carried out the project work under my supervision in the partial
fulfilment of the requirement for the award of the Masters of Business Administration
(MBA) - (SMU University)

SIGNATURE
SIGNATURE

Head of the Department

FACULTY IN CHARGE

Mr. Gaurav Negi

Ms. Deviyani Rohtagi

2
 DECLARATION

I Ravinder Pal Singh bearing Reg.no:-1502005762 hereby declare that this

project report entitled has been prepared by me towards the partial fulfilment
which is being submitted in partial fulfillment of the requirement for the award
of the Master of Business Administration(MBA) Degree under the guidance
MS. DEVIYANI ROTHAGI

I also declared that this project report is my original work and has not been
previously submitted for the award of any Degree, Diploma, fellowship or other
similar titles.

RAVINDER PAL SINGH

3
 ACKNOWLEDGEMENT

A lot of effort has gone into this training report. My thanks are due to many
people with whom I have been closely associated. I would like all those who
have contributed in completing this project. First of all, I would like to send my
sincere thanks to MS. DEVIYANI ROTHAGI for his helpful hand in the
completion of my project.

I would like to thank my entire beloved family & friends for providing me
monetary as well as non – monetary support, as and when required, without
which this project would not have completed on time. Their trust and patience is
now coming out in form of this project.

RAVINDER PAL SINGH

REGISTRTION NO:-1502005762

4
EXECUTIVE SUMMARY
This marketing strategic plan has been written keeping in mind the Indian operations
of Nike Inc. – the global sports shoe giant. It aims first, at analyzing the sports shoe
industry India and finding a place in it for Nike. It then sets out to describe the target
audience for the product range and finally suggests a host of marketing strategies and
activities that will help Nike to achieve its target of becoming the #1 sports shoe
brand in India.

The plan begins with a brief overview of the product category being dealt with,
namely premium quality sports shoes. It also dwells briefly on the history of
the company and its current position and activities.

The project moves on to the crux of the matter – the marketing plan to be followed
by Nike in India. Firstly, the objectives behind this plan and the core strategy are
stated. Customers to be eventually targeted are described and compared with
competitors’ customer targets. After starting the objectives and reasoning behind
them, the actual marketing programs are described in detail. This includes aspects
such as pricing, advertising, promotion, sales, channels, and the company website.
Suggestions are made on each and every one of these aspects; improvements and
innovations are recommended.
The plan then goes on to the customer analysis section. The customer base is
identified and various segments are pointed out. Various criteria and factors have been
taken into consideration while segmenting the market. We have also tried to ascertain
why customers buy these products, how they choose, and what factors matter most
when making their decisions.

The last few pages of this marketing plan deal with the various ways in which
the plan, once implemented, can be monitored and controlled.
5
 CONTENT

S.NO PARTICULARS PAGE NO.

CHAPTER – 1 INTRODUCTION TO STUDY

1.1 INTRODUCTION 11

1.2 OBJECTIVES OF THE STUDY 11-12

1.3 SCOPE OF THE STUDY
12
1.4 LIMITATIONS OF THE STUDY
12-13
CHAPTER-2 PROBLEM STATEMENT

2.1 PROBLEM STATEMENT (INCLUDING LITERATURE REVIEW) 14

CHAPTER – 3 RESEARCH METHODOLOGY

3.1 CONCEPT OF RESEARCH METHODOLOGY 15-16

3.2 RESEARCH HYPOTHESES
16-19
3.3 RESEARCH MODEL
19-28
3.4 RESEARCH PLAN
28-37
3.5 SAMPLE PLAN
37-48
3.6 RESEARCH PROCEDURE
48-61

CHAPTER –4 COMPANY PROFILE

62-97

6
5 CHAPTER – 5 DATA ANALYSIS & INTERPRETATION

98-107

6 CHAPTER-6 RESULT & DISCUSSION

108
7 CHAPTER-7 SUGGESTION AND RECOMMENDATIONS

109-114
8 CHAPTER – 8 LIMITATION & SCOPE OF FUTURE RESEARCH

8.1 LIMITATION 115-116

8.2 SCOPE OF FUTURE RESEARCH 116

9 CHAPTER – 9 CONCLUSION

CONCLUSION 117-121

10 ANNEXURE+

BIBLIOGRAPHY 122

QUESTIONNAIRE 123-124

List of Tables

7
 Title
Table No. Page
1. Table B.1 Sampling Unit for thermatic group and sector branches 42

under examination.

2. Table B.2 51

Calculating Chi-Square
3. Table B.3 51-52

Chi-Square Distribution

List of Figures

8
Figures No. Title Page

1. Figure 1.1 16

Research Hypotheses

2. Figure 1.2 22

Empira The World of Thories

3. Figure 1.3 23

Material Process and Monetary Process

4. Figure 1.4 37

Illustration of Population

5. Figure 1.5 38

Types of Population

6. Figure 1.6 46

Sampling Stages

7. Figure 1.7 46

Process of Sampling Design

8. Figure 1.8 47

Sample of People Selected in Four Stages

9. Figure 1.9 49

Punnett Square

List of Abbreviations

Sl.No Abbreviated Name Full Page

1. RTO Regional Transport Office 46

2. NHANES National Health and Nutrition Examination Survey 47

9
3. PSU Primary Sampling Unit 47

4. ICAER Indian Council of Applied Economic Research 48

5. IIT Indian Institute of Technology 48

6. CSIR Council of Scientific And Industrial Research 48

7. PHD Doctor of Philosophy 48

8. EFA Exploratory Factor Analysis 58

9. CFA Confirmation Factor Analysis 59

CHAPTER-1

INTRODUCTION TO STUDY
The project has been a learning experience for me and would not have been possible
without the support and guidance of the above mentioned people. Needless to say, I alone
remain responsible for any error that might have crept into the pages, despite of my best
possible efforts to avoid them.
10
 This marketing research project report has been written keeping in mind the Indian
operations of Nike – the global sports shoe giant. It aims first, at analyzing the sports shoe
industry of India and finding a place in it for Nike. It then sets out to describe the target
audience for the product range and finally suggests a host of marketing strategies and
activities that will help Puma to achieve its target of becoming the No-1 shoe brand in
India.
1.1 Introduction
Since the late 1980s, Business School marketing professor Itamar Simonson has looked
for ways to understand how consumers make choices. Much of his work debunks the
accepted theory that giving consumers what they want and making a profit are the most
basic principles of marketing. Customers may not know what they want, and second-
guessing them can be expensive, says the professor who teaches marketing and consumer
decision-making courses. In Simonson’s words, “The benefits and costs of fitting
individual customer preference are more complex and less deterministic than has
been assumed.” That’s because “customer preferences are often ill-defined and
susceptible to various influences, and in many cases, customers have poor insight into
their preferences.” In one of his recent papers, Simonson tackles the issue of one-to-one
marketing and mass customization. Supporters of these marketing approaches have
suggested that learning what customers want and giving them exactly what they want will
create customer loyalty and an insurmountable barrier to competition
1.2 Objectives of the Study
To the main objective of this study is learn the strategic plan that has been written keeping
in mind the Indian operations of Nike – the global sports shoe giant.
It aims at analyzing the sports shoe industry India and finding a place in it for Nike. To
study target audience for the product range and finally suggests a host of marketing
strategies and activities that will help Nike to achieve its target of becoming #1 sport
shoe brand in india.
To understand the nature of problem faced by customers towards the various products
of NIKE.
To study the nature of customer satisfaction efforts implemented by NIKE for its customers.

1.3 Scope of the Study

The project report begins with a brief overview of the product category being dealt with,
namely premium quality shoes. It also dwells briefly on the history of the company and its
11
current position and activities.
The project moves on to the crux of the matter – the marketing plan to be followed by Nike in
India. Firstly, the objectives behind this plan and the core strategy are stated. After stating the
objectives and reasoning behind them, the actual marketing programs are described in details.
This includes aspects such as pricing, advertising, promotion, sales, channels, and the
company website. Suggestions are made on each and every one of these aspects;
improvements and innovations are recommended.
The project report then goes on to the customer analysis section. The customer base is
identified and various segments are pointed out. Various criteria and factors have been taken
into consideration while segmenting the market. We have also tried to ascertain why
customers buy these products, how they choose, and what factors matter most when making
their decisions.
The last few pages of this marketing research project deal with the various ways in which the
recommendations, once implemented, can be monitored and controlled.

1.4 Limitation of the Study

The collected data are placed into an order. Percentages of respondents answered similarly
are calculated and placed in a table. Then this is interpreted. This involved drawing
conclusion from the gathered data. Interpretation changes the new information immerging
from the analysis into information that is pertinent or relevant to the study.

Due to limited time period and constrained working hours for most of the respondents, the
answers at times were vague enough to be ignored.

Geographical scope of the study was limited to a small area, which may not represent the
whole sector of India; Size of the sample is 50, which is, of course small in comparison
to entire population.

Due to limitation of time only few people were selected for the study. So the sample
of consumer was not enough to generalize finding of the study.

There can be many interpretations & explanations to the data collected. This is empirical

study and the research provides the explanation as understood by the researcher only.

12
The source of data for the study was primary data with the help of self-administered
questionnaire. Hence, the chance of biased response cannot be eliminated through
all necessary steps were taken to avoid the same.

The data taken from the secondary source like internet, newspaper, books may lack
some proper explanation or may be not properly interpreted.

The responses of customers are presented in a way convenient to the researcher and can be
interpreted in different ways.

CHAPTER-2

PROBLEM STATEMENT
2 PROBLEM STATEMENT (INCLUDING LITERATURE REVIEW)

Simonson tackles the issue of one-to-one marketing and mass customization. Supporters of
these marketing approaches have suggested that learning what customers want and giving
them exactly what they want will create customer loyalty and an insurmountable barrier to
competition. This marketing research project report has been written keeping in mind the
13
Indian operations of Nike Inc. – the global sports shoe giant. Since the late 1980s, Business
School marketing professor Itamar Simonson has looked for ways to understand how
consumers make choices. Much of his work debunks the accepted theory that giving
consumers what they want and making a profit are the most basic principles of marketing.
Customers may not know what they want, and second-guessing them can be expensive, says
the professor who teaches marketing and consumer decision-making courses. In Simonson’s
words, “The benefits and costs of fitting individual customer preference are more complex
and less deterministic than has been assumed.” That’s because “customer preferences are
often ill-defined and susceptible to various influences, and in many cases, customers have
poor insight into their preferences.” In one of his recent papers, Simonson tackles the issue of
one-to-one marketing and mass customization. Supporters of these marketing approaches
have suggested that learning what customers want and giving them exactly what they want
will create customer loyalty and an insurmountable barrier to competition.

CHAPTER – 3

RESEARCH METHODOLOGY

3.1 CONCEPT OF RESEARCH METHODOLOGY

Research will comprise defining and redefining problems, formulating hypothesis or

suggested solutions, collecting, organizing and evaluating data; making deductions and
reaching conclusions and at last carefully testing the conclusions to determine whether they
fit the formulating. In short, the search for Knowledge through Objective and Systematic
method of finding solutions to a problem is Research. SAMPLE SIZE AND SAMPLING
TECHNIQUES: The number of items selected from the universe to represent the universe is
14
called size of the sample. It is not feasible to cover all the customers of NIKE. So for the
purpose of this study, a total of 50 respondents will be approached. The sampling technique
used for the study will be convenience sampling. DATA COLLECTION: For the study, both
primary and secondary data will be collected. For primary data, a questionnaire can be
developed and administered to the respondents who are the customers of NIKE in Delhi by
the way of interview method. For secondary data, existing literature in form of magazines,
papers, company literature, book, web sources will be consulted. Question relating to
customer behaviour towards Nike shoes can also be included. QUESTIONNAIRE: For
conducting the primary customer satisfaction survey for NIKE SHOES, a structured
questionnaire with multiple choices related to overall satisfaction level of customers, their
grievances related to products offered by NIKE, etc. will be asked. The questionnaire will be
administered using interview technique. QUESTIONNAIRE DESIGN FORMULATION
Under this method, list of questions pertaining to the survey will be prepared consumers of
shoes. Questionnaire will have structured type questions as well as unstructured type
questions. Structured objective type questions will be prepared for the respondents with fixed
response categories. Some of the questions will be of multiple-choice type. The questions
will have more than one alternative. RESEARCH INSTRUMENTS Selected instrument for
Data Collection for Online survey is Questionnaire. STEPS FOLLOWED IN
COMPLETING THE STUDY Internet sites containing information on Nike shoes &
marketing will be browsed. Sample survey will be conducted. Data will be thoroughly
checked for error. DATA PROCESSING METHODOLOGY Once the primary data will be
collected, they will be edited – inspected, corrected and modified. Tabulation – bring similar
data together and totalling them in meaningful categories. Questionnaires will be edited. The
responses will be thoroughly checked in home for incorrect, inconsequential or
contradictions categories will be developed only often the replies has been reviewed The
collected data will be placed into an order. Percentages of respondents answered similarly
will be calculated and placed in a table. Then it will be interpreted. This will involve drawing
conclusion from the gathered data. Interpretation changes the new information emerging
from the analysis into information that is pertinent or relevant to the study.

Research comprise defining and redefining problems, formulating hypothesis or

suggested solutions; collecting, organizing and evaluating data; making deductions and
reaching conclusions; and at last carefully testing the conclusions to determine whether
they fit the formulating Hypothesis.
15
In short, the search for Knowledge through Objective and Systematic method of
finding solutions to a problem is Research.

3.2 RESRARCH HYPOTHESES

A hypothesis is a specific, testable prediction. It describes in concrete terms what

you expect will happen in a certain circumstance. A research hypothesis is the

statement created by researchers when they speculate upon the outcome of a research
or experiment. Every true experimental design must have this statement at the core of
its structure, as the ultimate aim of any experiment.

The hypothesis is generated via a number of means, but is usually the result of a process of
inductive reasoning where observations lead to the formation of a theory. Scientists then use
a large battery of deductive methods to arrive at a hypothesis that is testable, falsifiable and
realistic.

FIGURE 1.1 Purpose of a Hypotheses

The Purpose of a Hypothesis

A hypothesis is used in an experiment to define the relationship between two

variables. The purpose of a hypothesis is to find the answer to a question. A

formalized hypothesis will force us to think about what results we should look for

in an experiment.

16
The first variable is called the independent variable. This is the part of the

experiment that can be changed and tested. The independent variable happens first

and can be considered the cause of any changes in the outcome. The outcome is

called the dependent variable. The independent variable in our previous example

is not studying for a test. The dependent variable that you are using to measure

outcome is your test score.

Let's use the previous example again to illustrate these ideas. The hypothesis is

testable because you will receive a score on your test performance. It is

measurable because you can compare test scores received from when you did

study and test scores received from when you did not study.

A hypothesis should always:

 Explain what you expect to happen



 Be clear and understandable


 Be testable


 Be measurable


 And contain an independent and dependent variable

How to Develop a Hypothesis

Another important aspect of a hypothesis is that it should be based on research.

Remember that the purpose of a hypothesis is to find the answer to a question. The
first thing you should do if you want to answer a question is to find as much
information on the topic as you can. Before you come up with a specific hypothesis,
spend some time doing research. Then, start thinking of questions you still have.
After thoroughly researching your question, you should have an educated guess
about how things work. This guess about the answer to your question is where your
hypothesis comes from.
17
Let's imagine that you want to know why the leaves on the tree in your front yard

change color in the fall. First, you would research this phenomenon. You observe

what you see happen and read about the subject. You discover that the color

change happens when the temperature cools. What question does this information

make you ask?

You come up with the following question: 'Does temperature cause the leaves to

change color on the tree in my front yard?' Next, you ask yourself if this can be

tested. If it can be tested, you'll write a hypothesis that states what you expect to

find. Your hypothesis could be 'If lower temperatures cause leaves to change color

and the temperature surrounding a tree is decreased, then the leaves will change

color.'

How to Write a Hypothesis

Let's learn how to properly write a hypothesis using the previous example of

tomorrow's test. Examine the differences in the following hypotheses:

Not studying may cause a lower grade on my test.

This statement is not clear enough to be useful. Your hypothesis should be as

specific as possible. You're trying to find the answer to a question. If the

hypothesis is vague, it's unclear how to find the answer to your question.

If I do not study, then I will make a low grade on the test.

This statement makes a common mistake. You have written a simple cause and

effect prediction that is based on an unstated assumption. You are assuming that

not studying lowers test performance. You want to minimize these assumptions

when you state your hypothesis. A hypothesis is clearer if you state a proposed

relationship before making the prediction.

Every true experimental design must have this statement at the core of its structure, as
the ultimate aim of any experiment.
18
The hypothesis is generated via a number of means, but is usually the result of a process of
inductive reasoning where observations lead to the formation of a theory. Scientists then use
a large battery of deductive methods to arrive at a hypothesis that is testable, falsifiable and
realistic.

3.3 RESEARCH MODEL

When selecting the research method it is usually advisable to consider whether you can base
your work on an earlier theoretical model. Sometimes a model, even a preliminary one, can
help your work decisively, and in such a case it will also affect the logical process of
analysis. There are three alternatives which are discussed in more detail later on:

exploratory research (you have no model to start with),

expanding or refining an earlier model, and

research for testing hypotheses.


Exploratory Research

Research is exploratory when you use no earlier model as a basis of your study. The most
usual reason for using this approach is that you have no other choice. Normally you would
like to take an earlier theory as a support, but there perhaps is none, or all available
models come from wrong contexts.

On the other hand, even when there is relevant theory and models, sometimes you may prefer
not to use them. Reasons for this can be:

 Your goal is to document the object as completely as possible, not restricting
the description to those topics that have been documented in earlier studies.

 The object of study differs from all earlier studied objects. The goal of the study is to
describe its exceptional character which existing theories are unable to portray. In the
light of existing theories the object of study appears as an inexplicable anomaly.

 Phenomenological pursuit into deep understanding and distrust on
earlier descriptions and explanations.



19
Exploratory research means that hardly anything is known about the matter at the outset of
the project. You then have to begin with a rather vague impression of what you should
study, and it is also impossible to make a detailed work plan in advance.

The gradual process of accumulating intelligence about the object of study means also that it
will be impossible to start by defining the concepts of study. You have to start with a
preliminary notion of your object of study, and of its context. During the exploratory
research project, these provisional concepts then gradually gain precision.

In the absence of tried models and definite concepts you must start the exploratory study
from what you have: one or more objects of study. It is common that in the beginning of
exploratory study you will take a holistic look at the objects. It means that you start by
gathering as much information about the objects as possible, and postpone the task of
cutting away unnecessary data until you get a better.

Any object can be looked at from several different viewpoints, either from the angles of
various established sciences or just from miscellaneous practical points of view. As soon as
possible, you should specify the viewpoint of your study and explain how you understand or
"take" the object. This does not mean that you have to to start your work by clarifying the
essence of your object of study, i.e. what the object really is. Instead, you should try to
contemplate and clarify how you see the object: should it be defined on micro level as a result
of the individuals' instincts, drives and experiences, or maybe on macro level as an
expression of development in society.

The method of alternating point of view (like in the diagram above) can even be used as a
research method. It is especially suited to an explorative researcher working alone. It will
deepen his understanding and can sometimes reveal valuable new aspects to the topic, cf.
Hermeneutic Research.

The progress of a project of study becomes easier as soon as you have defined your point of
view and your problem. After this, you will need to gather only such empirical knowledge
that is related to the problem; that will enable you to restrict the material you will have to
analyse. This does not mean that you should disregard all the cases that do not fit into your
conjectures - sometimes anomalies or surprising cases can point the way to important
amendments or corrections to existing theory.

20
Sometimes it is difficult to define what is relevant in advance; it only becomes apparent
through analysis. In such a case you can simply start by studying one single specimen or case
which illustrates the interesting problem, and then you continue studying a gradually
growing number of objects until it becomes apparent that you cannot get deeper into the
problem. An indication of such a "saturated" state of study is that the study of new items or
cases no longer reveals new interesting information. You will often need to gather quite a lot
of material before you can define the final goal of your project, and a large part of this
material will not be used in the final analysis.

The exploratory analysis of empirical field observations starts by checking that the field reports
are written down intelligibly and without ambiguity. Often the original reports have been made in
hurry; in that case they should be clarified by the initial observer or interviewer. The same person
is often best adapted to extricate the significant findings from observations because he/she is able
to judge which details are important and which can be left out. In the same time he/she can start
building a preliminary model from those patterns which seem to recur often, or estimate how
well an earlier known model fits the observations.

As soon as the invariance in the data becomes apparent you can omit all the material that is
no longer relevant and compress the remaining, relevant information. This compacting is
usually done with the help of coding the typical and frequent elements, that is by assigning
short names, letters or other symbols to them. By cross-tabulating the symbols you can get an
overall view of all the material, and it will be easier to uncover its structure or rearrange it so
that a latent structure becomes visible.

Analysis in exploratory research is essentially abstraction and generalization. Abstraction

means that you translate the empirical observations, measurements etc. into concepts;
generalization means arranging the material so that it disengages from single persons,
occurrences etc. and focuses on those structures (invariances) that are common to all or
most of the cases.

It will seldom be possible to divide exploratory study into such clear phases as is common
in the case that the object has been studied earlier. According to Alasuutari (1993 p.22), in
qualitative analysis of empirical findings, you can distinguish two phases but these two
overlap:

 simplification of observations
21
  interpretation of results (or "solving the enigma")

In the simplification phase, the material is inspected from the theoretical point of view of
the study project, and only the points relevant from this angle are noted. Details differing
from one individual to another at random are omitted or pushed aside so that the general
lines of the data can be discerned more easily.

Simplification continues by finding the relationships between separate observations or

cases. Some tools for this work are comparison and classification. The goal is to find the
general rule or model that is valid in all or most of the observations. This model can be, for
example, development or evolution, causality, or a conscious action to attain an outcome
which is typical in normative research. -- In any case the analysis starts from separate cases
and aspires to create one or a few general models.

"Solving the enigma" does not always mean answering exactly those questions that were
asked at the outset of the project. Sometimes the most interesting questions are found at the
end of the research, when the researcher has become an expert on the subject. It is often
said that "data teach the researcher".

The purpose of descriptive exploratory research is to extract a structure from the source
material which in the best case can be formed as a rule that governs all the observations and
is not known earlier (per the definition of exploratory study). Finding the unknown structure
may need some creative innovation, because even the most sophisticated computerized
analysis methods cannot automatically uncover which type of structure is concealed in data.
Usually you first have to formulate a tentative pattern for the assumed structure in the
observations and then you can ask the computer to estimate how well the data corresponds to
the model, cf. Tools for Analysis.

In normative studies the exploratory approach is unusual, because the normative target -
improving something in the object - in general engages with a known theoretical background
which you can take as a basis of your study, thus shifting to the usually more effective method
of Research on the Basis of Earlier Theory which is explained in the next paragraph.

Nevertheless, sometimes it happens even in normative study that the direction of desirable
improvement is initially unclear, and your only choice is to start with the exploratory
approach. Such is the situation when you know that the present state of the object of study is
unsatisfactory but you do not know exactly what is wrong in it, neither do you know of any
22
superior usable substitutes for it. For example, in the initial stage of action research
everybody perhaps agrees that the present mode of working is unbearable but all known
remedies seem inapplicable, and the participants therefore start making from empty table
a descriptive model of the work to be used as a basis of development.

Research on the Basis of Earlier Theory

Many of the problems of exploratory research can be avoided if the researcher can start
with a model, developed in earlier studies, which he uses as a "working hypothesis". The
model can either consist of cases (holistic model) or of concepts (analytic model). During
the analysis, the researcher tries to see whether the collected material conforms to the model
or must he correct the model or look for a more suitable one.

Figure1.2 The World of Theories

Often the study simply proceeds by enlarging an earlier model. A good rule to be followed
in such a situation is: Start from what is known. Proceed by enlarging the mapped area, and
connect the new intelligence to the known facts. Sometimes all that you need is only an
adjustment of a few details in the existing model. This is often the case when the study shall
give grounds for a forecast or new product development and the environment of intended
application is slightly different from the one of the earlier study.

The existence of a tentative model helps in selecting the logical structure of the entire
research project and planning it. The model helps you to decide which material has to be
collected, from which cases or specimens and about which attributes or variables of these
cases. Even the recording of observations is facilitated because often you will be able to

23
utilize earlier definitions of variables. The same applies to analysis methods: often you can
borrow them from earlier works.

In descriptive study the project is often arranged as distinct phases, like in the diagram
above. First you demarcate the population about which you need knowledge, then select a
sample, gather the empirical data, analyze them, perhaps with the same method as in the
earlier study from which the model was taken, and finally assess the findings.

Adopting models from earlier treatises involves a risk: it can affect your observations so that
you wrongly discard the anomalies or those cases which too much differ from what would
be expected on the basis of the old theory. If this happens, you will never discover the
weaknesses of the old model.

Figure1.3 Material Process and Monetary Process

In normative study models are used for describing the existing problems and defining the
improvements to the object of study. If you can find an existing descriptive model of the
object, made in an earlier study, you can often transform it into a normative model by adding
an evaluative dimension to it. For example, the model of industrial production on the right
can be made normative by adding the dimension of profitability, and a target for it. Methods
for analyzing information and evaluations with normative models are discussed in
Normative Case Study , Normative Comparison , Normative Classification , Normative
Study of Variables and Normative History.

24
Once the target for development has been defined with the help of a normative model, the
project often continues as planning the practical operations, perhaps also realizing them and
measuring the results. Sometimes the same model can be used as a basis of all these
operations, like in the figure on the left, but usually you will have to refine a model
successively several times in the process of transforming a definition of goals into a plan of
action or into a design of a product. The latter process, for example, can include such
phases as product concept, various drafts of design, a series of prototypes and finally a
detailed proposal for the product.

Optimally a normative research project proceeds through successive stages:

1. evaluation of the initial state and defining the need for improvements

2. analysis of relationships and possibilities to change things

3. synthesis: proposal for improvement

4. evaluation of the final state.

It is quite usual that you will have to repeat the above sequence several times before you get
an acceptable result. Normative projects often deal with complex practical problems, and
when making a theoretical model of the problem, the researcher may wish to make the model
more easily manageable by simplifying it, i.e. by leaving out factors that seem nonessential.
However, in the final practical test or appraisal it may turn out that an excluded factor is
important after all, which makes it necessary to adjust the model and repeat the sequence
once more.

Hypothesis based Study

Sometimes the object of study is already well known and you just want to investigate its
behaviour in a specific situation. In such a situation you can choose to construct a hypothesis,
i.e. an expectation of the behaviour of the object, or a preliminary answer to the question that
you are studying. You are usually free to decide if you want to use one or not. E.g., if you
want to learn if x really equals two times y, you can set as your hypothesis

x = 2y

During your project you then collect empirical data which allow you to test your
hypothesis and see if it is true or not.
25
Hypotheses are always based on analytic models, and they are often causal. They are
always accurately stated and quite often stated as an arithmetic model, like for example

y = f(x)

where
x = the independent variable,
y = the dependent variable.

The above hypothesis includes only one variable of each type; there are, however,
usually more of them in real research projects.

If you choose to use a hypothesis, you should plan the logic around it in the way that Bunge
(1967, 9) explains:

1. Ask well formulated and fruitful questions.

2. Devise both grounded and testable hypotheses to answer the questions.

3. Derive logical consequences of the assumptions.

4. Design techniques to test the assumptions; test the techniques for relevance
and reliability.

5. Execute the tests.

6. Interpret the results.

7. Evaluate the truth claims of the assumptions and the fidelity of the techniques;

determine the domains in which the assumptions and the techniques hold.

It is seldom - perhaps never - possible to reach an absolute certitude when verifying a

hypothesis. This is the case especially when the hypothesis is intended to hold true anywhere,
i.e. also for the cases that are similar to those that have been examined. Therefore most
modern researchers accept in practice the idea that when speaking of 'truth' of a hypothesis
they actually mean verisimilitude or credibility. This distinction, nevertheless, has no
decisive consequences in practice: you can use 'credible' findings exactly in the same way as
'true' findings.

26
Disturbances. Usually the object of study is influenced by various factors besides the
independent variable mentioned in the hypothesis. These disturbances, sometimes called
"noise", prevent the researcher from clearly seeing the influence of the independent variable.
Such factors whose systematic influence is known beforehand can simply be eliminated by
making a suitable correction in the measurements. Unknown factors which cause detrimental
random variation in the dependent variable are more difficult to handle. The researcher can
be prepared for disturbances and for the random variation of the explained object in
alternative ways:

By studying more cases and calculating the average of the data

By shielding the research object in such a way that the disturbing influences will
be eliminated. This usually requires an experiment set up in a laboratory.

 By choosing the variables in the hypothesis in such a way that the influential

variables are dealt with as explaining factors and not as random variation.

The method of hypothesis was originally developed for descriptive studies. This type of
research aspires to get factual knowledge about the object of study, and the criterion which
is used in accepting or rejecting a descriptive hypothesis is factuality or truthfulness. The
same criterion is applied to other phases of descriptive project as well, as is explained in
Assessing Input Data , Assessing Correctness of Analysis and Assessing Theoretical Output.

In normative research a hypothesis is seldom used as such, but it is interesting to note that a
normative project often includes a decisive focal point which determines the project's success
or failure in much the same way than the test of a hypothesis does in a descriptive project.
This focal point is the final practical testing of the normative proposal. Because the target in
normative study is not just to get information but primarily to improve the object of study or
other similar objects, the principal criterion when testing normative development proposals is
not truth but instead practical value and functional operativeness. This criterion is discussed
in Evaluating Normative Proposals.

Another difference to testing a descriptive hypothesis is that the process of development need
not end in the test. If the first proposal must be rejected the normal practice is to prepare and
test another proposal. This means that the process of development returns to that of normative
research on the basis of earlier model, discussed above.

27
Tests of normative proposals are habitually carried out when developing a new product.
Their procedures are discussed in Presenting the Draft and Prototype and Evaluating a
Design Proposal. Similarly, in the development of an activity the project usually includes
practical testing of the proposals, as described in Assessing Activity Development.

3.4 RESEARCH PLAN

Research Design
Research design can be thought of as the structure of research – it is the "glue" that holds all
of the elements in a research project together.
A marketing research process cannot be completed without an effective research design. A
research design precisely specifies particular means and methods through which required
information can be collected for structuring the research as well as seeking specific
practical solutions to the problem.
According to the famous author Bernard S. Phillips:
“Research design is the blueprint for the collection, measurement and analysis of data. It aids
the scientist in allocation of his limited resources by posing crucial choices: Is the blueprint to
include the experiments, interviews, observations, analysis of records, stimulation or some
combination of these? Are the methods of data collection and research situation to be highly
structured? Is an intensive study of a small sample more effective than a less intensive study
of a large sample? Should the analysis be primarily qualitative or quantitative?” According to
Green & Tull in their book ‘Research for Marketing Decisions’;
“A research design is the specification of methods and procedures for acquiring the
information needed to structure or to solve problem. It is the overall operational pattern
or framework of the project that stipulates what information is to be collected from which
sources and by what procedures.”
Fred N. Kerlinger in “Foundations of Behavioural Research” defines research design as: “The
plan, structure and strategy of investigation conceived so as to obtain answers to research
questions and to control variance.”
Therefore, it can be summarised that research design is one step prior to data collection.
It is clear from the above definitions that the basic purpose of research design is the
right investigation.

28
Exploratory research design
Exploratory research design is conducted frequently in cases where the problem is not clearly
defined and also in situations where focus on real scope of work is not clear. Here researcher
takes initiative to study the problem in detail and then generate hypothesis to be tested. This
is the initial research which is done before conclusive research is undertaken.
Exploratory research aids in determining the best research design, selection of subjects and
data collection method and sometimes it even summarises that the problem or issue
doesn’t exist.
Exploratory research is quite informal in nature. It relies on secondary research data like:
Reviews from literature already available
Qualitative approaches like friendly discussion with consumers, employees,
competitors, or with management
Formal discussions like in depth interviews, pilot studies, case studies, face to
face interviews, focus groups and projective methods
Though the results of exploratory research are not usually conclusive but they help in taking
decisions properly in a given situation. However, lot of indications are given in the result of
qualitative research as to when, why, how, something happens but doesn’t make it clear
how many or how often.
In other words, this method is not a good representation of the sample data taken for research.

Conclusive research design

This type of research means providing information which can be useful in taking right kind
of decisions and/or reaching at right conclusion.
Conclusive research requires more formal design than the exploratory research. This
research is mostly quantitative in nature. It means the information can be easily counted and
summarised.
The main objective of this kind of research is to give reliable information and a clear
picture related to the population with the help of a valid research source or element. Testing
hypothesis is also conducted in this method.
Normally, this method relies on both primary data as well as secondary data. Primary data
denotes the data collected for the current study and the secondary data denotes the data
used from existing sources. Both the sources help in analysing a different kind of problem
every time than the original one.

29
There are mainly two types of conclusive research which you are going to study in the
next sections. These are:
Descriptive or statistical
research Causal research

Descriptive Research Design

Conclusive research design is subdivided into descriptive research and causal research.
You will study descriptive research design in this section.
Descriptive research is a commonly used type of conclusive research.
Descriptive studies are formal, rigid, well-structured and focused in nature.
This type of research involves the description of relationships between the number of
variable factors and working out conclusions.
Descriptive study starts with specific research questions where substantial information about
the research problem is known by conducting the pilot study. Thus, descriptive research
means a preconceived, formal and structured design to seek solution to a particular problem.
Descriptive Research is concerned with the ex-post facto analysis of related and inter-related
variables in real life situations. This analysis can be done on the basis of field study and
surveys.
The cross-sectional study is the most popular and widely used Descriptive
Research technique. It involves the collection of information from any given sample of
population elements only once. It is useful because it provides a quick snapshot of
what's going on with the variables of interest for our research problem.
Descriptive research studies require proper data analysis and inferences and the checklist
of effective data analysis is as follows:
Mention the question number correctly.
Mention headings, subheadings and other names correctly and sequentially.
Check information, the content of questions. The content should be able to
generate information needed to draw meaningful conclusions.
Consider the reasons for including questions.
Conduct primary analysis and identify information
value. Conduct further analysis if required.
For example, most significant example of this type of research is Census which is used
to count the number of population in the country.
Firms normally use opinion poll method. This is also a part of this research design.
30
Descriptive Research can be further divided into ‘Cross-sectional Design’ and
‘Longitudinal Design’ which you are going to study in next subsections.

DATA SOURCES
There are two types of data.
Source of primary data for the present study is collected through questionnaire and answered
by consumers of Nike shoes. The secondary data is collected from journals, books and
through Internet search.

PRIMARY DATA
The data that is collected first hand by someone specifically for the purpose of facilitating
the study is known as primary data. So in this research the data is collected from respondents
through questionnaire.

SECONDARY DATA
For the company information I had used secondary data like brochures, web site of
the company etc.
The Method used by me is Survey Method as the research done is Descriptive Research.

RESEARCH INSTRUMENTS
Selected instrument for Data Collection for Survey is Questionnaire.

QUESTIONNAIRE DESIGN FORMULATION

Under this method, list of questions pertaining to the survey are prepared for marketing
staff of consumers of Nike shoes.
Questionnaire has structured type questions as well as unstructured type questions. Structured
objective type questions are prepared for the respondents with fixed response categories. Some of
the questions are of multiple-choice type. The questions have more than one alternative.

Questionnaire: - A questionnaire consists of a set of questions presented to respondent for

their answers. It can be Closed Ended or Open Ended

Open Ended: - Allows respondents to answer in their own words & are difficult to
Interpret and Tabulate.
31
Close Ended: - Pre-specify all the possible answers & are easy to Interpret and Tabulate.

TYPES OF QUESTION INCLUDED:

DICHOTOMOUS QUESTIONS
Which has only two answers “Yes” or “No”?

MULTIPLE CHOICE QUESTIONS

Where respondent is offered more than two choices.

IMPORTANCE SCALE
A scale that rates the importance of some attribute.

RATING SCALE
A scale that rates some attribute from “highly satisfied ” to “highly unsatisfied “ and
“very inefficient” to “very efficient”

Cross-sectional design
There are two types of Cross-sectional design.
Single cross-sectional design: In this, only one sample of respondents and their
information is utilised and that is used only once in a study.
Multiple cross-sectional designs: In this, information is captured with the help of two
or more samples of respondents. Each sample’s information is used only for once. Though
information is collected at different times from different samples of the study.

You can analyse the cross-sectional design in a negative and positive way.
Thus, following are their merits and demerits:
Advantages of cross-sectional design
Cross-sectional method is user friendly, easy to understand and simple to
use. Minimum resources are required to work out on this study
This design is the best design in determining prevalence system (prevalence system
involves the number of cases or occurrences that exist at a specific period of time in a
defined population).
32
Disadvantages of cross-sectional design
This study is unable to find out the cause and effect relationship among various
factors. This study does not provide clear set of explanations for their findings.
You can understand this research method with the help of following example:
A study between height and age of people which shows negative relationship. It
gives following conclusive answers:
Young people are comparatively taller.
As people become old, they lose their height
Tall people have more risk to their life in comparison to short people.
This example shows that cross-sectional study does not give a full explanation of the case.
This method is unable to support their findings as well.
3.4.2 Longitudinal design
This study is concerned with panel research where information is generated by the
continuous analysis of variables at regular intervals. Thus, in panel research a sample of
respondents are interviewed on a regular basis to gain information.
In this type of research design, sample of population elements would be fixed and
measured repeatedly. The variables would remain the same for this research study.

This study is useful in conducting lot of activities like trend analysis, tracking changes in
behaviours over time like brand switching, levels of awareness, turnover etc) and checking
the long-term effects of marketing activities like market share, pricing effects etc.
Advantages of longitudinal design
The primary advantage of longitudinal designs is that they are very economical.
Since the sample respondents are fixed, there is no error of subject variations.
This research design gives more efficient estimators with same number and pattern
of observations in comparison to cross sectional designs.
It helps you in making differentiation between change over time in aggregate data
and changes within individuals.
Longitudinal research design enables factors of interest for their continuity and
stability over time and also identifies the sequential developments.
Disadvantages of longitudinal design
To select appropriate longitudinal design is a very crucial task.
Another challenge of longitudinal design is related to their development effects, duration
or measurement time.
33
The observations in this study are not independent.
Methods of analysis are also not as well developed, specifically for more
sophisticated models.
There are problems in using various software in this study.
One of the major challenges of longitudinal study is that this method involves
complex calculations.
Causal Research Design
Descriptive research is one type of conclusive research, other type of conclusive research
is causal research design.
Causal Research design is the study of cause and effect relationships between two or more
variables. Causal research depends on interviews and in the conduct of experiments.
Causal research is best suited when the aim of research is to recognise variables that cause
the phenomenon being predicted and understand why they cause what is being predicted.
William J. Goode & Paul K. Hatt in ‘Methods in Social Research’ defines cause and effect
relationship as: "when two or more cases of given phenomenon have one and only one
condition in common, that condition may be regarded as the cause and effect of that
phenomenon."
The set of causes generated to predict their effects, can be deterministic or probabilistic in
nature. The deterministic cause is the one which is essential and adequate for stimulating the
occurrence of another event. While the probabilistic cause is the one that is essential, but is
not the only one responsible for the stimulation of the occurrence of another event.
The objective is to determine which variable might be causing certain behaviour i.e., whether
there is a cause and effect relationship between variables, causal research must be
undertaken. This type of research is very complex and the researcher can never be completely
certain that there are not other factors influencing the causal relationship, especially when
dealing with people's attitudes and motivations. There are often much deeper psychological
considerations that even the respondent may not be aware of.
To identify causal mechanisms, the most universal plan of action taken by researchers is
what we call the ‘experiment design’ where causal analysis is applied to a standard
randomised experiment. Experimental research provides the most powerful design for testing
causal hypotheses.
Experimental Designs: This kind of study is a process which plans natural order events to meet

the specific objectives. In this method, certain factors are controlled to see the effect on

34
certain other factors. Here researcher observe the study carefully and do the experiment in
a correct order.
Because this study emphasis on the importance of the concept and ensure the right type
of information, result will totally depend upon the manipulation done by the researcher.
He makes new changes and interventions in the concept.
The following process will help you in determining the concept of experimental design:
trace out the problem and define
them define the population
focus on the sampling need
define the experimental design
The experimental design method includes various types:
Equivalent time series design
Here treatment cannot be given to all the respondents simultaneously.
Training is given to all the employees rotationally so that different types of training can
be provided to different groups of people.
Classic experimental design
Subjects are assigned randomly in this method. Treatment groups are conformable to
ANOVA designs in two ways:
 Between subject design: There are different subjects for each variable of independent
variables. E.g. to study the impact of political advertising, different types of media exposure
are used.
 Within subjects' (repeated measures) designs: There are same subjects used for
each level of the independent variable, as in beforeafter studies or panel studies.

Waiting list design
This method is used when demand exceeds supply. And due to limited supply, legitimate
treatment is given to only some of the citizens and not to all the citizens as it is impossible
due to shortage.
Tie-breaking design
Here the main focus of the study is depending upon merit basis. This situation occurs
usually in academic field where normally tied scores are received on merit based exams.
Then these scores are randomly assigned to a specific treatment and a control group.
Spatial separation design

35
Treatment groups are separated and have no experiment-relevant intercommunication. For
example, participative management concept is tried with a treatment group of -new,
randomly assigned employees in one location but not in another location.
Indifference curve designs
Some people will be indifferent towards receiving or not receiving the treatment, when
the attractiveness of the treatment can be adjusted at a point. Thus treatment is assigned to
a number of people randomly.
New organisation design
When a new organisation is established, like one providing job training to the new entrants,
opportunities may well arise which permit the random assignment of clients to a control.
Mandate change design
When the solution is unknown but change is required, treatment of random assignment is
done as in random assignment of students to classes with alternative books.
Quasi-experimental design
A quasi-experimental study is a type of evaluation which aims to determine whether program
or intervention has the intended effect on a study’s participants. This is an experiment in
which in which one has little or no control over the allocation of the treatments or other
factors being studied.
This study estimates the causal impact of an intervention on the targeted population.
The following example would help you in getting this point more elaborative.
For example, let us suppose you have completed your class 12th. Now you are going to take
admission in graduation. For this you already filled the admission forms of different
colleges. Now various colleges assign the cut off list on merit basis. Then you can see the list
for your enrolment in the college. This cut off list is a very good example of this quasi
experimental research design study.

3.5 SAMPLE PLAN

Population
. Population: Population refers to any group of people or objects that form the subject of
study in a particular survey and are similar in one or more ways. For example, the number of
full-time MBA students in a business school could form one population. If there are 200
such students, the population size would be 200. We may be interested in understanding their
perceptions about business education. If, in an organization there are 1,000 engineers, out of
which 350 are mechanical engineers and we are interested in examining the proportion of
mechanical engineers who intend to leave the organization within six months, all the 350
mechanical engineers would form the population of interest. If the interest is in studying how

36
 the patients in a hospital are looked after, then all the patients of the hospital would fall
under the category of population.
Element: An element comprises a single member of the population. Out of the 350
mechanical engineers mentioned above, each mechanical engineer would form an element of
the population.
Universe or population
Statistical survey or enquiries deal with studying various characteristics of unit belonging to
a group. The group consisting of all the units is called universe or population. The figure 1.4
depicts the population.

Fig. 1.4: Illustration of Population

Example 1
In the statistical survey aimed at determining average per capita income of the people
in the city, all earning individuals in the city form the population

Types of population
The figure 1.5 depicts the types of population along with the explanation

37
 Fig. 1.5: Types of Population
Note: Although many populations appear to be exceedingly large, no truly infinite
population of physical objects actually exists. Given limited resources and time it is
practically not possible to count the number of grains of sand on the beach. Such populations
are termed as infinite population for our study.

Sampling frame
The white pages, a collection of telephone directories in the United States, was commonly
used as a sampling frame for opinion polls.
In statistics, a sampling frame is the source material or device from which a sample is
drawn. It is a list of all those within a population who can be sampled, and may include
individuals, households or institutions.

Importance of the sampling frame is stressed by Jessen and Salant and Dillman.

In many practical situations the frame is a matter of choice to the survey planner, and
sometimes a critical one. [...] Some very worthwhile investigations are not undertaken at
all because of the lack of an apparent frame; others, because of faulty frames, have ended
in a disaster or in cloud of doubt.
— Raymond James Jessen

Obtaining and organizing a sampling frame

38
In the most straightforward cases, such as when dealing with a batch of material from a
production run, or using a census, it is possible to identify and measure every single item in the
population and to include any one of them in our sample; this is known as direct element
sampling. However, in many other cases this is not possible; either because it is cost-prohibitive
(reaching every citizen of a country) or impossible (reaching all humans alive).

Having established the frame, there are a number of ways for organizing it to improve
efficiency and effectiveness. It's at this stage that the researcher should decide whether
the sample is in fact to be the whole population and would therefore be a census.

This list should also facilitate access to the selected sampling units. A frame may also
provide additional 'auxiliary information' about its elements; when this information is related
to variables or groups of interest, it may be used to improve survey design. While not
necessary for simple sampling, a sampling frame used for more advanced sample techniques,
such as stratified sampling, may contain additional information (such as demographic
information). For instance, an electoral register might include name and sex; this information
can be used to ensure that a sample taken from that frame covers all demographic categories
of interest. (Sometimes the auxiliary information is less explicit; for instance, a telephone
number may provide some information about location.)

Sampling frame qualities

An ideal sampling frame will have the following qualities:

 all units have a logical, numerical identifier


 all units can be found – their contact information, map location or other
relevant information is present

 the frame is organized in a logical, systematic fashion

 the frame has additional information about the units that allow the use of more
advanced sampling frames

 every element of the population of interest is present in the frame

 every element of the population is present only once in the frame

 no elements from outside the population of interest are present in the frame
39
  the data is 'up-to-date.

Types of sampling frames

The most straightforward type of frame is a list of elements of the population (preferably
the entire population) with appropriate contact information. For example, in an opinion poll,
possible sampling frames include an electoral register or a telephone directory. Other
sampling frames can include employment records, school class lists, patient files in a
hospital, organizations listed in a thematic database, and so on. On a more practical levels,
sampling frames have the form of computer files.

Not all frames explicitly list population elements; some list only 'clusters'. For example, a
street map can be used as a frame for a door-to-door survey; although it doesn't show
individual houses, we can select streets from the map and then select houses on those
streets. This offers some advantages: such a frame would include people who have recently
moved and are not yet on the list frames discussed above, and it may be easier to use
because it doesn't require storing data for every unit in the population, only for a smaller
number of clusters.

Sampling frames problems

The sampling frame must be representative of the population and this is a question outside
the scope of statistical theory demanding the judgment of experts in the particular subject
matter being studied. All the above frames omit some people who will vote at the next
election and contain some people who will not; some frames will contain multiple records
for the same person. People not in the frame have no prospect of being sampled.

Because a cluster-based frame contains less information about the population, it may
place constraints on the sample design, possibly requiring the use of less efficient
sampling methods and/or making it harder to interpret the resulting data.

Statistical theory tells us about the uncertainties in extrapolating from a sample to the frame. It
should be expected that sample frames, will always contain some mistakes. In some cases, this
may lead to sampling bias. Such bias should be minimized, and identified, although

40
avoiding it completely in a real world is nearly impossible. One should also not assume
that sources which claim to be unbiased and representative are such.

In defining the frame, practical, economic, ethical, and technical issues need to be addressed.
The need to obtain timely results may prevent extending the frame far into the future. The
difficulties can be extreme when the population and frame are disjoint. This is a particular
problem in forecasting where inferences about the future are made from historical data. In
fact, in 1703, when Jacob Bernoulli proposed to Gottfried Leibniz the possibility of using
historical mortality data to predict the probability of early death of a living man, Gottfried
Leibniz recognized the problem in replying:

Nature has established patterns originating in the return of events but only for the most part.
New illnesses flood the human race, so that no matter how many experiments you have
done on corpses, you have not thereby imposed a limit on the nature of events so that in the
future they could not vary.
— Gottfried Leibniz

Leslie Kish posited four basic problems of sampling frames:

1. Missing elements: Some members of the population are not included in the frame.

2. Foreign elements: The non-members of the population are included in the frame.

3. Duplicate entries: A member of the population is surveyed more than once.

4. Groups or clusters: The frame lists clusters instead of individuals.

Problems like those listed can be identified by the use of pre-survey tests and pilot studies.

SAMPLING UNIT

A basic concept in sampling theory is the sampling unit, which is the minimum unit of
observation for information on the operative variables. The sampling unit must be clearly
defined for constructing the sampling frame. By convention in statistics, a capital “N” is used to
refer to the number of sampling units making up the universe, and a lowercase “n” for the
number of sampling units in the sample itself. The sampling unit best suited for the respective
sectors is shown in Table 3.1. Other sampling units can be defined as suggested by the
objective of the survey.

Table 3.1: Sampling unit for thematic group and sector or branch under examination
41
 Group Sector/branch Sampling unit

Demand Residential Home

- urban
- rural

Industrial Establishment

Commercial

Institutional

Supply Direct Plot

Indirect Establishment

Provision Producers Individual producers,

Transport operators companies

Commercial suppliers

Once the universe and sampling unit have been defined, and once the sampling frame is ready,
the sample design comprises two major stages: definition of type of sampling and
determination of sample size.

SAMPLE SIZE

Sample size must be determined independently for each universe, according to three factors:
the variability of the most important numerical variable, the level of confidence required and the
acceptable level of error. This is summarized by the following formula:7

no = (s2 . t2 , v)/ e2 (1) in terms of variance and absolute error

or

no = (cv2 . t2 , v)/ e2 in terms of variation coefficient and relative error

where:

no = size of sample

s2 = variance of the sample

t2 , v = critical value of Student’s ‘t’ test with significance level and v degrees of freedom

42
e = acceptable error

cv = variation coefficient = standard deviation of the sample / sample mean

v = degrees of freedom= n – 1

Variance (s2) and variation coefficient (VC) indicate the degree of homogeneity of the variable
under consideration in the sample. These are calculated - manually by calculator or with
Excel – with the data from a preliminary sample or earlier survey.

Acceptable error (e) refers to the allowable difference between sample mean and mean of the
universe. It is set in accordance with previous knowledge of the phenomenon under study,
and it is advisable to keep it within 10-20% - which can also be expressed in absolute values
with the units of measurement of the variable in question.

The critical value of t is obtained from tables in statistics books or from Excel, selecting first the
level of significance ( ) or its complement, the level of confidence (1- ). A level of confidence
of 0.95, which is equivalent to a = 0.05 is enough for surveys of this kind. In addition, in order to
define the degrees of freedom (v = n-1), a first assessment of the number (n) of cases in the
sample is needed. These two values are the entry data for the tables. Subsequently, the
sample size is specified by means of an iterative process, where the value of ‘n’ is obtained
using Formula (1) to determine the value of ‘t’.

This formula shows that the number of elements making up the sample is directly proportional
to the variance and value of t2, and inversely proportional to the square of the error. The sample
size will be large when: (a) the element under study is highly variable (high variance or
variation coefficient); (b) the level of confidence sought is high; and/or (c) the acceptable error
is low. Conversely, the sample size will be small if the phenomenon shows little variance, a low
level of confidence is set, and a high level of error is accepted.

From this it is clear that the size of a sample does not depend on the size of the universe.
Thus, starting with an equal level of confidence and error acceptance in a tropical rainforest
covering the same surface area as a temperate pine forest, the sample size will be larger for
the rainforest because of its greater heterogeneity in the wood stock variable in relation to the
pine forest.

So far no consideration has been given to the size of the universe in determining sample size.

Nevertheless, for a small universe (fewer than 120 sampling units), it is necessary to correct
the value of no obtained from Formula (1), by using Formula (2)8:

n = no/(1 + no/N) (2)

43
 where:

no = sample size obtained from Formula (1)

N = size of universe

n = definitive size of sample

Annex III gives the calculated sample size for the estimation of fuelwood consumption in a
residential sector for varying universe size and error margin and corrected for finite
population. It applies for the variable “specific fuelwood consumption”, where, due to the
abundance of case studies, the variation coefficient is known.

Variables to be used in calculating sample size

• To define sample size of any sector or branch of woodfuel demand, it is best to use the unit
consumption variable.

• In the industrial, commercial and institutional sectors it is not always possible to find data on unit
consumption, but one can use the volume of production per unit time, which is closely correlated
with unit consumption.

• In the case of direct supply (from forest, plantation, etc.) the important variables may be stock or
productivity, but the first is recommended as there is more secondary information and it is easier
to measure in a preliminary sample. If there are no data on stock, basal area data (G) may be
used.

• In sectors or branches of indirect supply (sawmills, carpentry workshops, etc.), volume of

production per unit time must be used.

• For provision sectors: in the case of producers, it is best to use volume of woodfuel production;
traders, volume of sales; and transport operators, transport capacity, all expressed per unit time.

The final decision on the size of the sample will depend on the agreed trade-off between
desired accuracy and availability of monetary, human and time resources for conducting the
field survey. It is recommended that sectors or branches having greater importance in woodfuel
demand, supply and provision be given priority in the allocation of resources for field surveys
so that estimations can be more accurate. In situations where it is not possible to realize the
sample size determined by statistical calculation, it is essential to survey at least ten sample
units per sector, branch or stratum, and to indicate the error in estimation, finding the e value of
Formula (1).

6 In statistics “universe” is also referred to as “population”.

7 Formula used to determine the sample size needed to estimate the population mean;
for 44
hypothesis testing for differences between means and variances other formulas are available.
Useful statistics reference books include Zar 1999, Cochran 1977, and Steel and Torrie 1988.
8 Also termed “correction for finite population”.

SAMPLE DESIGN
THE BASIS OF SAMPLING: -
Consumers of Nike shoes are chosen randomly, so that unbiased, representative sample
may be obtained.

The process of selecting samples from the population is referred to as sampling design. There
are two types of sampling designs—probability sampling design and non-probability
sampling design. Probability sampling designs are used in a conclusive research whereas non-
probability sampling designs are appropriate for an exploratory research.
Process of Sampling Design
Before you study the process of sampling design you must be aware of the stages of
the sampling.
There are basically two stages of sampling:

Figure 1.6: Sampling Stages

Single-stage sampling
In this sampling, targeted population elements are collected into a sampling frame. To select
a sample of element, one of the techniques is used among various techniques. These
techniques are random sampling, stratified sampling and systematic sampling.
Multi-stage sampling
Here sampling is done sequentially like country level is taken as first stage; census track level
comes at second stage; block level at third stage; household level at fourth stage and within
household level at final stage. In multi stage sampling, hierarchical structure of the
population is taken into consideration.

45
Further sampling design can be explained with the help of five
steps process which is given below in figure 1.7.

Figure 1.7: Process of Sampling

Design Let’s discuss each one in detail.
Define the targeted population: Population is defined as (i) elements, (ii) sampling
units, (iii) extent and (iv) time
Example: If a company wants to monitor the sales of its recently launched product,
the population will be:
(i) Element – company's product
(ii) Sampling unit – retail outlet,
supermarket (iii) Extent – Jaipur
(iv) Time – September 10th to Oct l0th 2006
Identify the frame of sampling: Sampling frame could be yellow pages, telephone
directory, various colonies in a municipal area list mentioning the details of all
colonies. Example: If you want to know about a car owner in Jaipur city, then the
transport office (RTO) can provide the name, address and type of vehicle possessed.
Specify sampling unit and techniques: It is defined as the element about
which information is required and then selecting probability or non-probability
methods. Example: retailers in a locality, husband or wife or children in a family.
Determine the sample size: This means deciding how many elements of the target
population are to be chosen. The sample size depends on the type of the study. The sample
size is small in exploratory study and this is large in size in descriptive study.
Select the sample and execute the process: This is the final step in the sampling process.
Example: The National Health and Nutrition Examination Survey
(NHANES) sampling procedure consists of 4 stages, shown in figure 1.8 and described below.

46
 Figure1.8: Sample of People Selected in Four Stages
In the first stage, a sample of countries is selected. These are called Primary Sampling Units
(PSU). In the second stage, these units are divided into segments. In the third stage, a sample
of households from each segment is selected. In the final stage, individuals from each selected
household are chosen as the final sample.
DATA PROCESSING METHODOLOGY
(i) Once the primary data have been collected, they are (I) edited – inspected, corrected
and modified.
(ii) Tabulation – bring similar data together and totaling them in meaningful categories.
Questionnaires are edited both in the field and later in home. Field editing took place just
often the interview. Generally editing is required for open type of questions. Brief notes or
symbols are frequently used during the interview to initially record the interviewer’s response
since it was not desirable to interrupt the flow with lengthy note taking. Then immediately
after the interview, brief notes are respondent. The responses are thoroughly checked in home
for incorrect, inconsequential or contradictions categories are developed only often the replies
has been reviewed. This review provided a feel for the pattern of answers and thus determine
what categories best represent the answers.

3.6 RESEARCH PROCEDURE

Chi-Square Test

Chi-square is a statistical test commonly used to compare observed data with data we would expect
to obtain according to a specific hypothesis. For example, if, according to Mendel's laws, you
expected 10 of 20 offspring from a cross to be male and the actual observed number was 8 males,
then you might want to know about the "goodness to fit" between the observed and expected. Were
the deviations (differences between observed and expected) the result of chance, or were they due
to other factors. How much deviation can occur before you, the investigator, must conclude that
47
something other than chance is at work, causing the observed to differ from the expected. The
chi-square test is always testing what scientists call the null hypothesis, which states that there is
no significant difference between the expected and observed result.

The formula for calculating chi-square ( 2) is:

2= (o-e)2/e

That is, chi-square is the sum of the squared difference between observed (o) and the expected
(e) data (or the deviation, d), divided by the expected data in all possible categories.

For example, suppose that a cross between two pea plants yields a population of 880 plants, 639
with green seeds and 241 with yellow seeds. You are asked to propose the genotypes of the
parents. Your hypothesis is that the allele for green is dominant to the allele for yellow and that the
parent plants were both heterozygous for this trait. If your hypothesis is true, then the predicted
ratio of offspring from this cross would be 3:1 (based on Mendel's laws) as predicted from the
results of the Punnett square (Figure B. 9).

Figure B.4 - Punnett Square. Predicted offspring from cross between green and yellow-
seeded plants. Green (G) is dominant (3/4 green; 1/4 yellow).

Figure 1.9

To calculate 2, first determine the number expected in each category. If the ratio is 3:1 and the

total number of observed individuals is 880, then the expected numerical values should be 660
green and 220 yellow.

Chi-square requires that you use numerical values, not percentages or ratios.

48
Then calculate 2 using this formula, as shown in Table B.1. Note that we get a value of 2.668 for

2. But what does this number mean? Here's how to interpret the 2 value:

1. Determine degrees of freedom (df). Degrees of freedom can be calculated as the number of
categories in the problem minus 1. In our example, there are two categories (green and yellow);
therefore, there is I degree of freedom.

2. Determine a relative standard to serve as the basis for accepting or rejecting the hypothesis.
The relative standard commonly used in biological research is p > 0.05. The p value is the
probability that the deviation of the observed from that expected is due to chance alone (no other
forces acting). In this case, using p >0.05, you would expect any deviation to be due to chance
alone 5% of the time or less.

3. Refer to a chi-square distribution table (Table B.2). Using the appropriate degrees of 'freedom,
locate the value closest to your calculated chi-square in the table. Determine the closestp
(probability) value associated with your chi-square and degrees of freedom. In this case ( 2=2.668),
the p value is about 0.10, which means that there is a 10% probability that any deviation from
expected results is due to chance only. Based on our standard p > 0.05, this is within the range
of acceptable deviation. In terms of your hypothesis for this example, the observed chi-squareis
not significantly different from expected. The observed numbers are consistent with those
expected under Mendel's law.

Step-by-Step Procedure for Testing Your Hypothesis and Calculating Chi-Square

1. State the hypothesis being tested and the predicted results. Gather the data by conducting the
proper experiment (or, if working genetics problems, use the data provided in the problem).

2. Determine the expected numbers for each observational class. Remember to use numbers, not
percentages.

Chi-square should not be calculated if the expected value in any category is less than 5.

49
3. Calculate 2 using the formula. Complete all calculations to three significant digits. Round off

your answer to two significant digits.

4. Use the chi-square distribution table to determine significance of the value.

a. Determine degrees of freedom and locate the value in the appropriate column.

2
b. Locate the value closest to your calculated on that degrees of freedom df row.

c. Move up the column to determine the p value.

5. State your conclusion in terms of your hypothesis.

a. If the p value for the calculated 2 is p > 0.05, accept your hypothesis. 'The deviation

is small enough that chance alone accounts for it. A p value of 0.6, for example, means that there
is a 60% probability that any deviation from expected is due to chance only. This is within the
range of acceptable deviation.

b. If the p value for the calculated 2 is p < 0.05, reject your hypothesis, and conclude

that some factor other than chance is operating for the deviation to be so great. For example, a p
value of 0.01 means that there is only a 1% chance that this deviation is due to chance alone.
Therefore, other factors must be involved.

The chi-square test will be used to test for the "goodness to fit" between observed and
expected data from several laboratory investigations in this lab manual.

Table B.2
Calculating Chi-Square

Green Yellow
Observed (o) 639 241
Expected (e) 660 220
Deviation (o - e) -21 21
Deviation2 (d2) 441 441
d2/e 0.668 2
2 = d2/e = 2.668 . .

50
Table B.3
Chi-Square Distribution

Degrees of

Freedom
Probability (p)
(df)
0.95 0.90 0.80 0.70 0.50 0.30 0.20 0.10 0.05 0.01 0.001
1 0.004 0.02 0.06 0.15 0.46 1.07 1.64 2.71 3.84 6.64 10.83

2 0.10 0.21 0.45 0.71 1.39 2.41 3.22 4.60 5.99 9.21 13.82

3 0.35 0.58 1.01 1.42 2.37 3.66 4.64 6.25 7.82 11.34 16.27

4 0.71 1.06 1.65 2.20 3.36 4.88 5.99 7.78 9.49 13.28 18.47

5 1.14 1.61 2.34 3.00 4.35 6.06 7.29 9.24 11.07 15.09 20.52

6 1.63 2.20 3.07 3.83 5.35 7.23 8.56 10.64 12.59 16.81 22.46

7 2.17 2.83 3.82 4.67 6.35 8.38 9.80 12.02 14.07 18.48 24.32

8 2.73 3.49 4.59 5.53 7.34 9.52 11.03 13.36 15.51 20.09 26.12

9 3.32 4.17 5.38 6.39 8.34 10.66 12.24 14.68 16.92 21.67 27.88

10 3.94 4.86 6.18 7.27 9.34 11.78 13.44 15.99 18.31 23.21 29.59

Nonsignificant Significant
9.7‘t’ Distribution

T-test

A t-test is any statistical hypothesis test in which the test statistic follows a Student's t-
distribution under the null hypothesis. It can be used to determine if two sets of data are
significantly different from each other.

A t-test is most commonly applied when the test statistic would follow a normal
distribution if the value of a scaling term in the test statistic were known. When the scaling
term is unknown and is replaced by an estimate based on the data, the test statistics (under
certain conditions) follow a Student's t distribution.
51
The‘t’ distribution was developed by W.S.Gossett in the pet name ‘student’. Therefore, it
is known as student’s ’t’ distribution. The properties of ‘t’ distribution are:

Most t-test statistics have the form t = Z/s, where Z and s are functions of the data.
Typically, Z is designed to be sensitive to the alternative hypothesis (i.e., its magnitude
tends to be larger when the alternative hypothesis is true), whereas s is a scaling parameter
that allows the distribution of t to be determined.

As an example, in the one-sample t-test , where is

the sample mean from a sample X1,X2,…,Xn, of size n, s is the ratio of sample standard
deviation over population standard deviation, σ is the population standard deviation of the
data, and μ is the population mean.

The assumptions underlying a t-test are that

 X follows a normal distribution with mean μ and variance σ2



s2 follows a χ 2 distribution with p degrees of freedom under the null hypothesis,

where p is a positive constant

Z and s are independent.

In a specific type of t-test, these conditions are consequences of the population being studied,
and of the way in which the data are sampled. For example, in the t-test comparing the means
of two independent samples, the following assumptions should be met:

Each of the two populations being compared should follow a normal distribution. This
can be tested using a normality test, such as the Shapiro–Wilk or Kolmogorov–
Smirnov test, or it can be assessed graphically using a normal quantile plot.

If using Student's original definition of the t-test, the two populations being compared
should have the same variance (testable using F-test, Levene's test, Bartlett's test, or
the Brown–Forsythe test; or assessable graphically using a Q–Q plot). If the sample
sizes in the two groups being compared are equal, Student's original t-test is highly

52
 robust to the presence of unequal variances.[10] Welch's t-test is insensitive to
equality of the variances regardless of whether the sample sizes are similar.

 The data used to carry out the test should be sampled independently from the two
populations being compared. This is in general not testable from the data, but if the
data are known to be dependently sampled (i.e., if they were sampled in clusters),
then the classical t-tests discussed here may give misleading results.

Most two-sample t-tests are robust to all but large deviations from the assumptions.

9.7.1 Uses of ‘t’ test

The ‘t’ test is used:
To test a specified value

To test the differences between values (independent

sample) As a paired ‘t’–test (dependent sample)

To construct confidence interval for the est

Z-test

A Z-test is any statistical test for which the distribution of the test statistic under the null
hypothesis can be approximated by a normal distribution. Because of the central limit
theorem, many test statistics are approximately normally distributed for large samples. For
each significance level, the Z-test has a single critical value (for example, 1.96 for 5% two
tailed) which makes it more convenient than the Student's t-test which has separate critical
values for each sample size. Therefore, many statistical tests can be conveniently performed
as approximate Z-tests if the sample size is large or the population variance known. If the
population variance is unknown (and therefore has to be estimated from the sample itself)
and the sample size is not large (n < 30), the Student's t-test may be more appropriate.

If T is a statistic that is approximately normally distributed under the null hypothesis, the next
step in performing a Z-test is to estimate the expected value θ of T under the null hypothesis, and
then obtain an estimate s of the standard deviation of T. After that the standard score
Z = (T − θ) / s is calculated, from which one-tailed and two-tailed p-values can be calculated

53
as Φ(−Z) (for upper-tailed tests), Φ(Z) (for lower-tailed tests) and 2Φ(−|Z|) (for two-
tailed tests) where Φ is the standard normal cumulative distribution function.

Use in location testing

The term "Z-test" is often used to refer specifically to the one-sample location test comparing
the mean of a set of measurements to a given constant. If the observed data X1, ..., Xn are (i)
uncorrelated, (ii) have a common mean μ, and (iii) have a common variance σ2, then the
sample average X has mean μ and variance σ2 / n. If our null hypothesis is that the mean value
of the population is a given number μ0, we can use X −μ0 as a test-statistic, rejecting the null
hypothesis if X − μ0 is large.

To calculate the standardized statistic Z = (X − μ0) / s, we need to either know or have an

approximate value for σ2, from which we can calculate s2 = σ2 / n. In some applications, σ2 is
known, but this is uncommon. If the sample size is moderate or large, we can substitute the
sample variance for σ2, giving a plug-in test. The resulting test will not be an exact Z-test
since the uncertainty in the sample variance is not accounted for—however, it will be a good
approximation unless the sample size is small. A t-test can be used to account for the
uncertainty in the sample variance when the sample size is small and the data are exactly
normal. There is no universal constant at which the sample size is generally considered large
enough to justify use of the plug-in test. Typical rules of thumb range from 20 to 50
samples. For larger sample sizes, the t-test procedure gives almost identical p-values as the
Z-test procedure.

Other location tests that can be performed as Z-tests are the two-sample location test and the
paired difference test.

Conditions

For the Z-test to be applicable, certain conditions must be met.

Nuisance parameters should be known, or estimated with high accuracy (an example of
a nuisance parameter would be the standard deviation in a one-sample location test). Z-
tests focus on a single parameter, and treat all other unknown parameters as being fixed
at their true values. In practice, due to Slutsky's theorem, "plugging in" consistent
estimates of nuisance parameters can be justified. However if the sample

54
 size is not large enough for these estimates to be reasonably accurate, the Z-test may
not perform well.

The test statistic should follow a normal distribution. Generally, one appeals to the
central limit theorem to justify assuming that a test statistic varies normally. There is
a great deal of statistical research on the question of when a test statistic varies
approximately normally. If the variation of the test statistic is strongly non-normal, a
Z-test should not be used.

If estimates of nuisance parameters are plugged in as discussed above, it is important to use
estimates appropriate for the way the data were sampled. In the special case of Z-tests for
the one or two sample location problem, the usual sample standard deviation is only
appropriate if the data were collected as an independent sample.

In some situations, it is possible to devise a test that properly accounts for the variation
in plug-in estimates of nuisance parameters. In the case of one and two sample location
problems, a t-test does this.

Example

Suppose that in a particular geographic region, the mean and standard deviation of scores on
a reading test are 100 points, and 12 points, respectively. Our interest is in the scores of 55
students in a particular school who received a mean score of 96. We can ask whether this
mean score is significantly lower than the regional mean—that is, are the students in this
school comparable to a simple random sample of 55 students from the region as a whole, or
are their scores surprisingly low?

First calculate the standard error of the mean:

where is the population standard deviation.

Next calculate the z-score, which is the distance from the sample mean to the
population mean in units of the standard error:

55
In this example, we treat the population mean and variance as known, which would be
appropriate if all students in the region were tested. When population parameters are
unknown, a t test should be conducted instead.

The classroom mean score is 96, which is −2.47 standard error units from the population
mean of 100. Looking up the z-score in a table of the standard normal distribution, we find
that the probability of observing a standard normal value below −2.47 is approximately 0.5 −
0.4932 = 0.0068. This is the one-sided p-value for the null hypothesis that the 55 students are
comparable to a simple random sample from the population of all test-takers. The two-sided
p-value is approximately 0.014 (twice the one-sided p-value).

Another way of stating things is that with probability 1 − 0.014 = 0.986, a simple random
sample of 55 students would have a mean test score within 4 units of the population mean.
We could also say that with 98.6% confidence we reject the null hypothesis that the 55
test takers are comparable to a simple random sample from the population of test-takers.

The Z-test tells us that the 55 students of interest have an unusually low mean test score
compared to most simple random samples of similar size from the population of test-takers.
A deficiency of this analysis is that it does not consider whether the effect size of 4 points is
meaningful. If instead of a classroom, we considered a subregion containing 900 students
whose mean score was 99, nearly the same z-score and p-value would be observed. This
shows that if the sample size is large enough, very small differences from the null value can
be highly statistically significant. See statistical hypothesis testing for further discussion of
this issue.

Z-tests other than location tests

Location tests are the most familiar Z-tests. Another class of Z-tests arises in maximum
likelihood estimation of the parameters in a parametric statistical model. Maximum likelihood
estimates are approximately normal under certain conditions, and their asymptotic variance can
be calculated in terms of the Fisher information. The maximum likelihood estimate divided by its
standard error can be used as a test statistic for the null hypothesis that

56
 the population value of the parameter equals zero. More generally, if is the maximum

likelihood estimate of a parameter θ, and θ0 is the value of θ under the null hypothesis,

can be used as a Z-test statistic.

When using a Z-test for maximum likelihood estimates, it is important to be aware that the
normal approximation may be poor if the sample size is not sufficiently large. Although
there is no simple, universal rule stating how large the sample size must be to use a Z-test,
simulation can give a good idea as to whether a Z-test is appropriate in a given situation.

Z-tests are employed whenever it can be argued that a test statistic follows a normal
distribution under the null hypothesis of interest. Many non-parametric test statistics, such as
U statistics, are approximately normal for large enough sample sizes, and hence are often
performed as Z-tests.
Factor analysis
Factor analysis is the method used to reduce a large number of variables into smaller ones.
Charles Spearman was the first person to use the factor analysis. This method analyses the
correlation among a total set of variables. This is a technique used to examine the relationship of
entire set of interdependent variables without considering the differences between dependent and
independent variables.
For example, factor analysis is used in a firm to reduce a large number of factors into
smaller groups:
1. Factor No. 1: product
(a) Size
(b) Colour
(c) Weight
(d) Design
2. Factor No. 2: Price
(a) Cash terms
(b) Credit terms
(c) Cost of guarantees
3. Factor No. 3: Staff
57
(a) Knowledge
(b) Qualification
(c) Performance
(d) Availability
4. Factor No. 4: Service
(a) Based on documentation
(b) Payment options
There are numerous applications of factor analysis in marketing
research. Some of the examples are as follows:
While doing market segmentation, factor analysis helps in identifying the groups of
the customers.
In product research, this analysis helps in determining the brand factor that highly
influence consumer buying.
In pricing research, factor analysis helps in identifying the psychographic characteristics of
the price sensitive consumers.
Factor analysis can be classified in two types: Exploratory and
Confirmatory. Let’s discuss them in detail.

Exploratory factor analysis: The statistical method of exploratory factor analysis (EFA) is
helpful in uncovering the underlying structure of variables which are relatively large in size.
The main objective of this analysis is to understand the relationship among measured variables.
Confirmatory factor analysis: Confirmatory factor analysis (CFA) is a statistical technique
used to verify the factor structure of a set of observed variables. CFA is the next step after EFA
to determine the factor structure of the data.
Multiple Regression Analysis

Multiple regression analysis is an extension of two variable regression analysis. In this analysis, two
or more independent variables are used to estimate the values of a dependent variable, instead of one
independent variable.

Objectives of multiple regression analysis are:

To derive an equation which provides estimates of the dependent variable from values of the
two or more independent variables
To obtain the measure of the error involved in using the regression equation as a basis
of estimation
58
 To obtain a measure of the proportion of variance in the dependent variable accounted for
or explained by the independent variables

Multiple regression equation explains the average relationship between the given variables and the
relationship is used to estimate the dependent variable. Regression equation refers to the equation for
estimating a dependent variable. Estimating dependent variable X1 from the independent variables
X2, X3……, is known as regression equation of X1 on X2, X3………. Regression equation, when
three variables are involved, is given below:
X 1.23 = a1.23+ b1.23 X2+ b13.2 X3
where, X1.23 is an estimated value of the dependent variable
X2 and X3 are independent variables.
a1.23 = (Constant) the intercept made by the regression plan. It gives the value of the
dependent variable, when all the independent variables assume a value equal to zero.
b1.23 and b13.2 = partial regression coefficients or net regression coefficients.
b1.23 = measures the amount by which a unit change in X2 is expected to affect X1 when X3 is
held constant.

Application of Multiple Regressions

Multiple regressions analysis can be applied to test the factors such as export elasticity, import
elasticity, and structural change (contribution of manufacturing sector towards GDP)
influencing over employment. Here, employment is a dependent variable.

•Multiple regression analysis is an extension of two variable regression analysis.

•In this analysis, two or more independent variables are used to estimate the values of a
dependent variable, instead of one independent variable.

•Objectives of multiple regression analysis are:

To derive an equation which provides estimates of the dependent variable from values of two
or more independent variables

To obtain the measure of the error involved in using the regression equation as a basis of estimation

59
To obtain a measure of the proportion of variance in the dependent variable accounted for
or explained by the independent variables.

STEPS FOLLOWED IN COMPLETING THE STUDY

(i) Libraries at (a) Indian Council for Applied Economic Research (ICAER),
(b) Indian Institute of Technology, (IIT) Delhi,
(c) Council of scientific and industrial Research (CSIR)
(d)Doctor of Philosophy (PHD) chamber of commerce, are visited. Management /
marketing books, journals are consulted.
(ii) Internet sites containing information on Nike shoes & marketing are browsed.
(iii) Sample survey was conducted.
(iv) Data was thoroughly checked for error
The collected data are placed into an order. Percentages of respondents answered similarly
are calculated and placed in a table. Then this is interpreted. This involved drawing
conclusion from the gathered data. Interpretation changes the new information immerging
from the analysis into information that is pertinent or relevant to the study.

CONCLUSION WAS DRAWN BASED ON THE SURVEY FINDINGS

Finally recommendation was made to improve the sales strategy of Nike shoes to increase the
sales volume in ladies segment.
LIMITATIONS OF RESEARCH
The geographical area was very much limited to residential area & so the results are
not particularly reflection of the current behavior.
BIASES AND NON-COOPERATION OF THE RESPONDENTS.
 The collected data are placed into an order. Percentages of respondents answered similarly
are calculated and placed in a table. Then this is interpreted. This involved drawing
conclusion from the gathered data. Interpretation changes the new information immerging
from the analysis into information that is pertinent or relevant to the study.

 Due to limited time period and constrained working hours for most of the respondents,
the answers at times were vague enough to be ignored.

 Most of the people in India take their Nike Shoes in the period preceding March & so the
response to initial contacts were not all encouraging and that has been the primary reason in the
inability to quantify the results large enough so as to deduce any relevant outcomes.

60
 CHAPTER-4
COMPANY PROFILE
Nike, Inc. is an American multinational corporation that is engaged in the design, development, manufacturing
and worldwide marketing and sales of footwear, apparel, equipment, accessories and services. The company
is headquartered near Beaverton, Oregon, in the Portland metropolitan area. It is one of the world's largest
suppliers of athletic shoes and apparel and a major manufacturer of sports equipment, with revenue in excess
of US$24.1 billion in its fiscal year 2012 (ending May 31, 2012). As of 2012, it employed more than 44,000
people worldwide. In 2014 the brand alone was valued at $19 billion, making it the most valuable brand
among sports businesses.

The company was founded on January 25, 1964, as Blue Ribbon Sports, by Bill Bowerman and Phil Knight,
and officially became Nike, Inc. on May 30, 1971. The company takes its name from Nike, the Greek goddess
of victory. Nike markets its products under its own brand, as well as Nike Golf, Nike Pro, Nike+, Air Jordan,
Nike Blazers, Air Force 1, Nike Dunk, Air Max, Foamposite, Nike Skateboarding, and subsidiaries including
Brand Jordan, Hurley International and Converse. Nike also owned Bauer Hockey (later renamed Nike Bauer)
between 1995 and 2008, and previously owned Cole Haan and Umbro. In addition to manufacturing
sportswear and equipment, the company operates retail stores under the Niketown name. Nike sponsors
many high-profile athletes and sports teams around the world, with the highly recognized trademarks of "Just
Do It" and the Swoosh logo.

Origins and history

61
 A Nike Factory Store in Vaughan Mills

Nike, originally known as Blue Ribbon Sports (BRS), was founded by University of Oregon track athlete
Phil Knight and his coach Bill Bowerman in January 1964. The company initially operated as a distributor
for Japanese shoe maker Onitsuka Tiger (now ASICS), making most sales at track meets out of Knight's
automobile.

According to Otis Davis, a student athlete whom Bowerman coached at the University of Oregon, who
later went on to win two gold medals at the 1960 Summer Olympics, Bowerman made the first pair of
Nike shoes for him, contradicting a claim that they were made for Phil Knight. Says Davis, "I told Tom
Brokaw that I was the first. I don't care what all the billionaires say. Bill Bowerman made the first pair of
shoes for me. People don't believe me. In fact, I didn't like the way they felt on my feet. There was no
support and they were too tight. But I saw Bowerman make them from the waffle iron, and they were
mine."

In 1964, in its first year in business, BRS sold 1,300 pairs of Japanese running shoes grossing $8,000. By
1965 the fledgling company had acquired a full-time employee, and sales had reached $20,000. In 1966,
BRS opened its first retail store, located at 3107 Pico Boulevard in Santa Monica, California next to a
beauty salon, so its employees no longer needed to sell inventory from the back of their cars. In 1967, due
to rapidly increasing sales, BRS expanded retail and distribution operations on the East Coast, in
Wellesley, Massachusetts.

By 1971, the relationship between BRS and Onitsuka Tiger was nearing an end. BRS prepared to launch
its own line of footwear, which would bear the Swoosh newly designed by Carolyn Davidson. The
Swoosh was first used by Nike on June 18, 1971, and was registered with the U.S. Patent and Trademark
Office on January 22, 1974.

In 1976, the company hired John Brown and Partners, based in Seattle, as its first advertising agency.
The following year, the agency created the first "brand ad" for Nike, called "There is no finish line", in
which no Nike product was shown. By 1980, Nike had attained a 50% market share in the U.S. athletic
shoe market, and the company went public in December of that year.

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Together, Nike and Wieden+Kennedy have created many print and television advertisements, and
Wieden+Kennedy remains Nike's primary ad agency. It was agency co-founder Dan Wieden who coined
the now-famous slogan "Just Do It" for a 1988 Nike ad campaign, which was chosen by Advertising Age
as one of the top five ad slogans of the 20th century and enshrined in the Smithsonian Institution. Walt
Stack was featured in Nike's first "Just Do It" advertisement, which debuted on July 1, 1988. Wieden
credits the inspiration for the slogan to "Let's do it", the last words spoken by Gary Gilmore before he was
executed.

Throughout the 1980s, Nike expanded its product line to encompass many sports and regions throughout
the world. In 1990, Nike moved into its eight-building World Headquarters campus in Beaverton, Oregon.
The first Nike retail store, dubbed Niketown, opened in downtown Portland in November of that year.

Phil Knight announced in mid-2015 that he is planning to step down as chairman of Nike in 2016.

Acquisitions

Nike has acquired several apparel and footwear companies over the course of its history, some of which
have since been sold. Its first acquisition was the upscale footwear company Cole Haan in 1988, followed
by the purchase of Bauer Hockey in 1994. In 2002, Nike bought surf apparel company Hurley
International from founder Bob Hurley. In 2003, Nike paid US$309 million to acquire Converse, makers
of the Chuck Taylor All-Stars line of sneakers. The company acquired Starter in 2004 and Umbro, known
as the manufacturers of the England national football team's kit, in 2008.

In order to refocus on its core business lines, Nike began divesting of some of its subsidiaries in the
2000s. It sold Starter in 2007 and Bauer Hockey in 2008. The company sold Umbro in 2012 and Cole
Haan in 2013. As of 2013, Nike owns two key subsidiaries: Converse Inc. and Hurley International.

Finance

Nike Inc. will buy back $8 billion of Nike's class B stock in 4 years after the current $5 billion buyback
program is completed in second quarter of fiscal 2013. Up to September 2012, Nike Inc. has bought back
$10 billion of stock.

Nike was made a member of the Dow Jones Industrial Average in 2013, when it replaced Alcoa.

On December 19, 2013, Nike Inc.'s quarterly profit rose due to a 13 percent increase in global orders for
merchandise since April of that year. Future orders of shoes or clothes for delivery between December and
April, rose to $10.4 billion. Nike shares (NKE) rose 0.6 percent to $78.75 in extended trading.
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In November 2015, Nike announced it would initiate a $12 billion share buyback, as well as a two-for-
one stock split, with shares to begin trading at the decreased price on December 24. The split will be the
seventh in company history.

On April 26, 2016, it was announced that Nike would release the Nike Air Force 180 "Olympic"
associated with the dream team of 1992. It will drop on July 7 at select Nike Sportswear retailers.

Products

A Nike brand athletic shoe

A pair of Nike Air Jordan I basketball shoes

Sports equipment

Nike produces a wide range of sports equipment. Their first products were track running shoes. They
currently also make shoes, jerseys, shorts, cleats, baselayers, etc. for a wide range of sports, including
track and field, baseball, ice hockey, tennis, association football (soccer), lacrosse, basketball, and cricket.
Nike Air Max is a line of shoes first released by Nike, Inc. in 1987. Additional product lines were
introduced later, such as Air Huarache, which debuted in 1992. The most recent additions to their line are
the Nike 6.0, Nike NYX, and Nike SB shoes, designed for skateboarding. Nike has recently introduced
cricket shoes called Air Zoom Yorker, designed to be 30% lighter than their competitors'. In 2008, Nike
introduced the Air Jordan XX3, a high-performance basketball shoe designed with the environment in
mind.

Nike sells an assortment of products, including shoes and apparel for sports activities like association
football, basketball, running, combat sports, tennis, American football, athletics, golf, and cross training
64
for men, women, and children. Nike also sells shoes for outdoor activities such as tennis, golf,
skateboarding, association football, baseball, American football, cycling, volleyball, wrestling,
cheerleading, aquatic activities, auto racing, and other athletic and recreational uses. Nike recently teamed
up with Apple Inc. to produce the Nike+ product that monitors a runner's performance via a radio device
in the shoe that links to the iPod nano. While the product generates useful statistics, it has been criticized
by researchers who were able to identify users' RFID devices from 60 feet (18 m) away using small,
concealable intelligence motes in a wireless sensor network.

In 2004, Nike launched the SPARQ Training Program/Division. Some of Nike's newest shoes contain
Flywire and Lunarlite Foam to reduce weight. The Air Zoom Vomero running shoe, introduced in 2006
and currently in its 11th generation, featured a combination of groundbreaking innovations including a full
length air cushioned sole, an external heel counter, a crashpad in the heel for shock absorption, and Fit
Frame technology for a stable fit.

The 2010 Nike Pro Combat jersey collection were worn by teams from the following universities:
Miami, Alabama, Boise State University, Florida, Ohio State, Oregon State University, Texas Christian
University, Virginia Tech, West Virginia, and Pittsburgh. Teams will wear these jerseys in key matchups
as well as any time the athletic department deems it necessary.

Street fashions

The Nike brand, with its distinct V shaped logo, quickly became regarded as a status symbol in modern
urban fashion and hip-hop fashion due to its association with success in sport. Beginning in the 1980s,
various items of Nike clothing became staples of mainstream American youth fashion, especially
tracksuits, shell suits, baseball caps, Air Jordans, and Air Max running shoes with thick, air cushioned
rubber soles and contrasting blue, yellow, green, white, or red trim. Limited edition sneakers and
prototypes with a regional early release were known as Quickstrikes, and became highly desirable items
for teenage members of the sneakerhead subculture.

By the 1990s and 2000s, American and European teenagers associated with the preppy or popular clique
began combining these sneakers, leggings, sweatpants, crop tops, and tracksuits with regular casual chic
street clothes such as jeans, skirts, leg warmers, slouch socks, and bomber jackets. Particularly popular
were the unisex spandex Nike Tempo compression shorts worn for cycling and running, which had a mesh
lining, waterproofing, and, later in the 2000s, a zip pocket for a Walkman or MP3 player.

From the late 2000s into the 2010s, Nike Elite basketball socks began to be worn as everyday clothes by
fans of hip-hop and young children. Originally plain white or black, these socks had special shock
65
absorbing cushioning in the sole plus a moisture wicking upper weave. Later, Nike Elite socks became
available in bright colors inspired by throwback basketball uniforms, often with contrasting bold abstract
designs, images of celebrities, and freehand digital print to capitalise upon the emerging nostalgia for
1990s fashion.

In 2015, a new self lacing shoe was introduced that will officially release in 2016. Called the Nike Mag,
it had a preliminary limited release in 2015, only available by auction with all proceeds going to the
Michael J. Fox Foundation. This was done again in 2016.

Nike have introduced a premium line, focused more on street wear than sports wear called NikeLab

Headquarters

Nike's world headquarters are surrounded by the city of Beaverton, but are within unincorporated
Washington County. The city attempted to forcibly annex Nike's headquarters, which led to a lawsuit by
Nike, and lobbying by the company that ultimately ended in Oregon Senate Bill 887 of 2005. Under that
bill's terms, Beaverton is specifically barred from forcibly annexing the land that Nike and Columbia
Sportswear occupy in Washington County for 35 years, while Electro Scientific Industries and Tektronix
receive the same protection for 30 years. Nike is planning to build a 3.2 million square foot expansion to
its World Headquarters in Beaverton. The design will target LEED Platinum certification and will be
highlighted by natural daylight, and a grey water treatment center.

Controversy

Nike office in North America.

Nike has contracted with more than 700 shops around the world and has offices located in 45 countries
outside the United States. Most of the factories are located in Asia, including Indonesia, China, Taiwan,
India, Thailand, Vietnam, Pakistan, Philippines, and Malaysia. Nike is hesitant to disclose information
about the contract companies it works with. However, due to harsh criticism from some organizations like
CorpWatch, Nike has disclosed information about its contract factories in its Corporate Governance
Report.
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 Sweatshops

Nike has been criticized for contracting with factories (known as Nike sweatshops) in countries such as
China, Vietnam, Indonesia and Mexico. Vietnam Labor Watch, an activist group, has documented that
factories contracted by Nike have violated minimum wage and overtime laws in Vietnam as late as 1996,
although Nike claims that this practice has been stopped. The company has been subject to much critical
coverage of the often poor working conditions and exploitation of cheap overseas labor employed in the
free trade zones where their goods are typically manufactured. Sources for this criticism include Naomi
Klein's book No Logo and Michael Moore documentaries.

Campaigns have been taken up by many colleges and universities, especially anti-globalisation groups, as
well as several anti-sweatshop groups such as the United Students Against Sweatshops.

As of July 2011, Nike stated that two-thirds of its factories producing Converse products still do not meet
the company's standards for worker treatment. A July 2011 Associated Press article stated that employees
at the company's plants in Indonesia reported constant abuse from supervisors.

Child labor allegations

During the 1990s, Nike faced criticism for the use of child labor in Cambodia and Pakistan in factories it
contracted to manufacture soccer balls. Although Nike took action to curb or at least reduce the practice,
they continue to contract their production to companies that operate in areas where inadequate regulation
and monitoring make it hard to ensure that child labor is not being used. In 2001, a BBC documentary
uncovered occurrences of child labor and poor working conditions in a Cambodian factory used by Nike.
The documentary focused on six girls, who all worked seven days a week, often 16 hours a day.

Strike in China factory

In April 2014, one of the biggest strikes in mainland China took place at the Yue Yuen Industrial
Holdings Dongguan shoe factory, producing amongst others for Nike. Yue Yuen did underpay an
employee by 250 yuan (40.82 US Dollars) per month. The average salary at Yue Yuen is 3000 yuan per
month. The factory employs 70,000 people. This practice was in place for nearly 20 years.

Justin Gatlin sponsorship

In March 2015, Nike drew criticism after announcing a new sponsorship deal with American sprinter
Justin Gatlin who had served two bans for doping. Nike had previously dropped Gatlin after his second
failed drug test and resulting long term ban. Critics said that Nike was sending out a bad message by
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endorsing an athlete who has never been repentant for his actions and still causes widespread discontent
within the sport. English sprinter Marlon Devonish described the deal as "a kick in the teeth to the 99% of
guys who are clean".

Environmental record

According to the New England-based environmental organization Clean Air-Cool Planet, Nike ranks
among the top three companies (out of 56) in a survey of climate-friendly companies. Nike has also been
praised for its Nike Grind program (which closes the product lifecycle) by groups like Climate Counts.
One campaign that Nike began for Earth Day 2008 was a commercial that featured basketball star Steve
Nash wearing Nike's Trash Talk Shoe, which had been constructed in February 2008 from pieces of
leather and synthetic leather waste from factory floors. The Trash Talk Shoe also featured a sole
composed of ground-up rubber from a shoe recycling program. Nike claims this is the first performance
basketball shoe that has been created from manufacturing waste, but it only produced 5,000 pairs for sale.

Another project Nike has begun is called Nike's Reuse-A-Shoe program. This program, started in 1993, is
Nike's longest-running program that benefits both the environment and the community by collecting old
athletic shoes of any type in order to process and recycle them. The material that is produced is then used
to help create sports surfaces such as basketball courts, running tracks, and playgrounds

A project through the University of North Carolina at Chapel Hill found workers were exposed to toxic
isocyanates and other chemicals in footwear factories in Thailand. In addition to inhalation, dermal
exposure was the biggest problem found. This could result in allergic reactions including asthmatic
reactions.

Marketing strategy

Nike promotes its products by sponsorship agreements with celebrity athletes, professional teams and
college athletic teams.

Advertising

In 1982, Nike aired its first national television ads, created by newly formed ad agency Wieden+Kennedy
(W+K), during the broadcast of the New York Marathon. The Cannes Advertising Festival has named
Nike its Advertiser of the Year in 1994 and 2003, making it the first company to receive that honor twice.

Nike also has earned the Emmy Award for best commercial twice since the award was first created in the
1990s. The first was for "The Morning After," a satirical look at what a runner might face on the morning
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of January 1, 2000 if every dire prediction about the Y2K problem came to fruition. The second was for a
2002 spot called "Move," which featured a series of famous and everyday athletes in a variety of athletic
pursuits.

Beatles song

Nike was criticized for its use of the Beatles song "Revolution" in a 1987 commercial against the wishes
of Apple Records, the Beatles' recording company. Nike paid US$250,000 to Capitol Records Inc., which
held the North American licensing rights to the recordings, for the right to use the Beatles' rendition for a
year.

Apple sued Nike Inc., Capitol Records Inc., EMI Records Inc. and Wieden+Kennedy for $15 million.[99]
Capitol-EMI countered by saying the lawsuit was "groundless" because Capitol had licensed the use of
"Revolution" with the "active support and encouragement of Yoko Ono, a shareholder and director of
Apple."

Nike discontinued airing ads featuring "Revolution" in March 1988. Yoko Ono later gave permission to
Nike to use John Lennon's "Instant Karma" in another advertisement.

New media marketing

Nike was an early adopter of internet marketing, email management technologies, and using broadcast
and narrowcast communication technologies to create multimedia marketing campaigns.

Minor Threat advertisement

In late June 2005, Nike received criticism from Ian MacKaye, owner of Dischord Records,
guitarist/vocalist for Fugazi and The Evens, and front man of the defunct punk band Minor Threat, for
appropriating imagery and text from Minor Threat's 1981 self-titled album's cover art in a flyer promoting
Nike Skateboarding's 2005 East Coast demo tour.

On June 27, Nike Skateboarding's website issued an apology to Dischord, Minor Threat, and fans of both
and announced that they have tried to remove and dispose of all flyers. They stated that the people who
designed it were skateboarders and Minor Threat fans themselves who created the advertisement out of
respect and appreciation for the band. The dispute was eventually settled out of court between Nike and
Minor Threat.

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 Niketown at Oxford Circus, London

Nike 6.0

As part of the 6.0 campaign, Nike introduced a new line of T-shirts that include phrases such as "Dope",
"Get High" and "Ride Pipe" – sports lingo that is also a double entendre for drug use. Boston Mayor
Thomas Menino expressed his objection to the shirts after seeing them in a window display at the city's
Niketown and asked the store to remove the display. "What we don't need is a major corporation like
Nike, which tries to appeal to the younger generation, out there giving credence to the drug issue," Menino
told The Boston Herald. A company official stated the shirts were meant to pay homage to extreme sports,
and that Nike does not condone the illegal use of drugs. Nike was forced to replace the shirt line.

NBA uniform and apparel deal

In June 2015, Nike signed an 8-year deal with the NBA to become the official apparel supplier for the
league, beginning with the 2017–18 season. The brand takes over for Adidas, who provided the uniforms
and apparel for the league since 2006. Unlike previous deals, Nike's logo will appear on NBA game
jerseys – a first for the league.

Sponsorship

Ronaldinho (pictured with Barcelona in 2007) appeared in a 2005 Nike advertisement that went viral on
YouTube, becoming the site's first video to reach one million views.
Nike pays top athletes in many sports to use their products and promote and advertise their technology
and design.

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Nike's first professional athlete endorser was Romanian tennis player Ilie Năstase. The first track
endorser was distance runner Steve Prefontaine. Prefontaine was the prized pupil of the company's co-
founder, Bill Bowerman, while he coached at the University of Oregon. Today, the Steve Prefontaine
Building is named in his honor at Nike's corporate headquarters.

Nike has also sponsored many other successful track and field athletes over the years, such as Carl Lewis,
Jackie Joyner-Kersee and Sebastian Coe. The signing of basketball player Michael Jordan in 1984, with
his subsequent promotion of Nike over the course of his career, with Spike Lee as Mars Blackmon, proved
to be one of the biggest boosts to Nike's publicity and sales.

Nike has been the official kit sponsor for the Indian cricket team since 2005.

Nike is a major sponsor of the athletic programs at Penn State University and named its first child care
facility after Joe Paterno when it opened in 1990 at the company's headquarters. Nike originally
announced it would not remove Paterno's name from the building in the wake of the Penn State sex abuse
scandal. After the Freeh Report was released on July 12, 2012, Nike CEO Mark Parker announced the
name Joe Paterno would be removed immediately from the child development center. A new name has yet
to be announced.

Nike also sponsored association football players such as Ronaldinho, Ronaldo, Cristiano Ronaldo, Didier
Drogba, Neymar, Zlatan Ibrahimović, Thierry Henry, Wayne Rooney, Francesco Totti, Andrés Iniesta and
Landon Donovan among others.

In January 2013, Nike signed Rory McIlroy, the then No 1 golfer in the world to a 10-year sponsorship deal
worth $250 million. The deal includes using Nike's range of golf clubs, a move Nick Faldo previously
described as "dangerous" for McIlroy's game. On February 21, 2013, Nike announced it suspended its contract
with South African athlete Oscar Pistorius, due to his being charged with premeditated murder. In August
2014, Nike announced that they will not renew their kit supply deal with Manchester United after the 2014–15
season, citing rising costs. Since the start of the 2015–16 season, Adidas has manufactured Manchester
United's kit as part of a world-record 10-year deal worth a minimum of £750 million.

Nike is currently sponsoring a group of long-distance runners in an attempt to run a sub-two hour 26.2
mile marathon. The current world record is 2:02:57. Nike is putting together a team of “designers,
scientists, coaches, and statisticians” with the goal of having one or more runners break the record by 3
percent in the spring of 2017.

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 Causes
In 2012, Nike is listed as a partner of the (RED) campaign, together with other brands such as Girl, American
Express and Converse. The campaign's mission is to prevent the transmission of the HIV virus from mother to
child by 2015 (the campaign's byline is "Fighting For An AIDS Free Generation")

INDUSTRY ANALYSIS

MAJOR MACRO ENVIRONMENT FORCES

Political/Legal Environment: Due to the industry’s strong global presence, there are many legal
restraints that must be taken into consideration. There are positive aspects such as those provided by
NAFTA and GATT such as, reduced import/export duties when operating in Mexico and Canada, and
access to international markets and tariff cutbacks as provided by GATT. However with the formation of
the European Union and the introduction of the Euro, has increased European influence on import
controls, but it has also created one European market. In 1995 the EU (European Union) enforced on
imported athletic footwear from China and Indonesia anti-dumping duties. The U.S.’s diplomatic relations
with countries such as China and Vietnam is critical for shoe manufacturers who want to produce in those
countries. In addition to these changes, there are also laws that vary from country to country which may
provide opportunities or impose restrictions.

SOCIOCULTURAL

The most influential cultural change would be how to approach the changing youth markets who are
mostly interested in boots, and sandals. Even though the consumers in the footwear industry have become
more brand conscious; that does not mean that they are buying more athletic shoes. The industry was
experiencing a decrease in health and fitness awareness and practices, but it is believed that the onset of
the twenty first century has brought it back to wear it use to be in the early 90’s.

DEMOGRAPHIC

The industry is realizing the influx of women’s sport players and leisure fitness participants, and is
preparing to accommodate such an increase in female consumers. Also as women increase their
consumption the younger generation is decreasing; due to the popularity of boots and sandals.
Additionally because of the increase and profitability of technological industries some countries are
deciding not to manufacture shoes in hopes of making more money in other industries.

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 ECONOMIC

Due to the organization of the European Union and the disbursement of the Euro some economic
discomfort in participating countries may be felt. In addition to this, other economic changes may be felt
through the increase of inflation and unemployment in Asia and the Pacific Rim, Latin America, and
Russia, consequently having a negative effect on shoe sales. Furthermore the fluctuation of foreign
currency and interest rates, may also have negative effects on the industry.

TECHNOLOGICAL

As the nature of science and technology change new advances are being made, but because of the
industries competitive nature each company makes their own advances, and then copyrights them. The
industry has come very far by studying the fashion, leisure, fitness and sport consumers.

INDUSTRY- GROWING OR MATURE?

It is still a growing industry, because new advances in shoe technology and athletic wear are made
everyday. Also, with the influx of clothing designers into the athletic shoe market, the industry cannot be
mature. No one company within the industry has really lived up to its true potential yet. For example, Nike
has a very large percent of the market and they themselves are still growing.

SWOT ANALYSIS OF NIKE

Strengths:

 Brand name recognition, because Nike has been around so long, the brand is recognized and
respected both internationally and domestically.

 Brand loyalty, Nike has consistently produced quality products that appeal to its consumers both
internationally and domestically.

 Nike carries a wide arrangement of products with a large amount of options for personal preference.


 Nike is constantly trying to increase their international presence.


 Low Manufacturing cost

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 Nike has an on-line store where custom shoes may be purchased


 In such a competitive environment Nike steps it up by investing a large portion of their income into
R&D, with the formation of the Nike Sport Research Laboratory in 1980, and the introduction of
the Advance Product Engineering department; Nike is making sure that they stay in control of
their market share. These two departments ensure that Nike has new shoe styles and are constantly
developing new products.

 Nike is the world’s no. 1 shoemaker. It designs and sells shoes for a variety of sports
including baseball, golf, cheerleading, volleyball, tennis and football.
 Nike uses a “Make to Stock” customer order which provides a fast service to customers from
available stock.
 Nike operates Nike Town shoe and sportswear stores, Nike factory outlets and Nike Women
shops. Nike sells its products throughout US and in more than 180 countries.
Nike is strong at research and development, as is evidenced by its evolving and innovative
product range. They then manufacture wherever they can produce high quality product at
the lowest possible price.
 Nike is a global brand. It is the number one sports brand in the World. Its famous ‘Swoosh’ is
instantly recognizable, and Phil Knight (Founder and CEO) even has it tattooed on his
ankle.



 Weaknesses:

 It is a global brand and no.1 shoe maker.
 Nike has the joint venture with Apple’s IPod in continued innovation.
 It has strong distribution channels.
 It has strong position over its minimal long term debt.
 Has innovative shoe design which enable consumer to design their own shoe online.

 It has diversified products worldwide.
 Has strong marketing campaigns and endorses different products.
 Have different segments as baseball, golf and footwear etc.
 Its sales highly depend on the footwear segment.
 It has violations in history and they provide minimal wage rate to its Workers.
 Has poor conditions in work places, It is having bad reputation.
 Has higher price compared to its competitors as Adidas.

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  Contract manufacturing of shoes to low-wage factories makes Nike susceptible to laws, and
economic problems abroad.

 Opportunities:


 Product Diversification, with new technology and increased earnings they should be able to invest
even more into R & D.

 Increase their global presence by expanding their services to countries such as, Chile, Peru, Bolivia,
India, Mexico, and South Africa in an attempt to serve those with the largest populations.

 The key is more advertising, encourage young people to purchase Nike’s even if they are not sport’
players.

 Increase marketing to the female consumer.


 Increase manufacturing of products that the new generation is interested, specifically boots and
sandals.

 Threats:


 Increase competition both domestically and internationally.


 Change in the young consumer preferences to sandals and boots.


 High inflation and unemployment in Asia and Pacific Rim, Latin America, and Russia may cause a
decline in shoe sales.

 The fluctuation of foreign currency and interest rate may pose a threat to earnings.


 Import and export regulations.

5 P’S IN NIKE’S MARKETING MIX

PRODUCT:

NIKE’s athletic footwear products are designed primarily for specific athletic use, although a large
percentage of the products are worn for casual or leisure purposes. They place considerable emphasis

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on high quality construction and innovative design for men, women and children. Running, basketball,
children’s, cross training and women’s shoes are currently our top-selling product categories and expect
them to continue to lead in product sales in the near future. However, they also market shoes designed
for outdoor activities, tennis, golf, soccer, baseball, football, bicycling, volleyball, wrestling,
cheerleading, aquatic activities, hiking, and other athletic and recreational uses. They sell active sports
apparel covering most of the above categories, athletically inspired lifestyle apparel, as

well as athletic bags and accessory items. NIKE apparel and accessories are designed to complement
their athletic footwear products, feature the same trademarks and are sold through the same marketing
and distribution channels. They often market footwear, apparel and accessories in “collections” of
similar design or for specific purposes. They also market apparel with licensed college and professional
team and league logos. They sell a line of performance equipment under the NIKE brand name,
including sport balls, timepieces, eyewear, skates, bats, gloves, and other equipment designed for sports
activities. They also have agreements for licensees to produce and sell NIKE brand swimwear, cycling
apparel, maternity exercise wear, children’s clothing, school supplies, timepieces, and electronic media
devices. They also sell small amounts of various plastic products to other manufacturers through our
wholly-owned subsidiary, NIKE IHM, Inc. and plastic injected and metal products to other
manufacturers through our wholly-owned subsidiary.

PRICE

Nike aims at giving high value, fairly priced products to its customers. Its price range vary for different
categories of products and also vary in different countries

PLACE

Nike sell their products primarily through a combination of retail accounts, independent distributors,
licensees and subsidiaries in about 200 countries. For e.g.

In United States, it operates NIKETOWN shoe and sportswear stores, and NIKE Women shops

In Europe, the distribution channel is centralized. European Distribution Center (EDC) receives Nike
products from all over the world & serves retail store across Europe

In India, the distribution network of Nike India currently boasts of eight distributors, 25 exclusive Nike
outlets, 15 multi-brand outlets and 20 speciality doors across major cities. However, the exclusive
distribution and retailing channel for the brand in India is Sierra Group.
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PROMOTION

The company has used both sports marketing and advertising to promote and build the brand.

SPORTS MARKETING

From the beginning, Nike has used athletes to promote the Nike brand. During the early years, the
athletes were part of a grassroots strategy, promoting Nike by telling their teammates and friends about
their great shoes. Later, Nike started paying athletes to wear Nike shoes. This was part of the pyramid of
influence marketing strategy, which Nike believed characterized the athletic footwear industry. At the
top of the pyramid was a small group of serious athletes, who Nike believed set the trend for the whole
market. If Nike could establish a strong reputation with the serious athlete group, this reputation would
trickle down to the other segments (“weekend jocks” and “street users”) lower down in the pyramid who
were responsible for generating larger sales volume.

Nike recruited athletes who not only could win but who had strong personalities and could stir up
emotion to create lasting ties with the consumer. Nike used the athletes throughout their career and tried
to present them as real people, to let the consumers feel that they knew them. Nike wanted to “win the
heart of the consumer as well as their feet.”

Athlete endorsements and sports marketing works well for many of Nike’s categories, it is not
appropriate for all of them. For example, the fitness segment, which includes joggers, hikers and
aerobics, is less focused on top performance, and subsequently sports heroes are not as heavily relied
upon as endorsers of the shoes. Furthermore, the Nike brand personality has to speak to both men and
women, who differ in their reasons for participating in fitness activities. Men see exercise as a way to
get stronger or live longer, while women have broader objectives – they want to get fit, but sports and
fitness also means empowerment and self-esteem.

Nike has also experienced unique challenges in international markets. Global stars, such as Michael
Jordan and Tiger Woods are used to convey Nike’s heritage of authentic athletic performance, while
local endorsers are used to connect with the relevant local market segments. To this end, Nike has
launched a global event-marketing division whose mission has been to create specific athletic events
designed to raise awareness of the Nike brand at a more grassroots level. The result was a powerful

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message communicating Nike’s authenticity, brand values and mystique to overseas consumers on a
local level.

ADVERTISING

Nike’s innovative advertising has played a crucial role in building the brand identity. The ads have been
designed to communicate Nike’s performance leadership to consumers. The company had developed
close relationships with athletes, and it didn’t want to talk to them in any phony or manipulative way.
Nike was obsessed with authenticity, in terms of both the product and the communication. And they had
a sense of what was cool.” Therefore, when Nike began to advertise, the company wanted to talk to the
athletes in a way that respected their intelligence, time, and knowledge of sports. The ads featured the
athletes sharing their thoughts and feelings about their sport, in an open and honest way that established
an emotional tie with the consumer. The ads linked the consumers to the Nike brand through the
emotions of sports and fitness – competition, determination, achievement, fun, even the spiritual rewards
of participating in sports and fitness activities. This emotional tie with the consumer is the basis of a
long-standing relationship with the Nike brand, which was essential in the highly competitive footwear
market. Nike has always been innovative in the product area, they wanted to be innovative in advertising
too. This meant taking risks with new advertising concepts. Nike uses advertising to complement sports
marketing and to build the global brand.

PUNCHLINE

Nike ----- "Just do it" ----. The punch line communicates that using Nike can improve your performance
by enhancing the self-confidence.

This punch line has helped Nike to carry the USP along with it, So that consumers are able to
differentiate it from the same need fulfilling products. It is the voice of the brand, which primarily gives
out the minimum momentum, thrust or impetus to push the brand in the mind of the customer. Hence,
this punch line is considered as the “5th ‘P’ of the Marketing mix of Nike”.

SALES AND MARKETING

Company experience moderate fluctuations in aggregate sales volume during the year. However, the
mix of product sales may vary considerably from time to time as a result of changes in seasonal and
geographic demand for particular types of footwear, apparel, and equipment. Because NIKE is a
consumer products company, the relative popularity of various sports and fitness activities and changing

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design trends affect the demand for its products. So, they must therefore respond to trends and shifts in
consumer preferences by adjusting the mix of existing product offerings, developing new products,
styles and categories, and influencing sports and fitness preferences through aggressive marketing. This
is a continuing risk. Failure to timely and adequately respond could have a material adverse affect on our
sales and profitability.

INTEGRATED MARKRTING COMMUNICATION

Nike’s ability to coordinate integrated marketing communication that really connects with customers is
outstanding. For example, the “Swoosh” is so familiar that the name no longer needs to appear along
with it. The company Web site is updated constantly, announcing new products and offering more sales
opportunities for the company. With features such as three-dimensional product views, a gift/product
finder, Nike customization tools and the Nike TechLab, Nike is utilizing its Internet channel to the
fullest.

Nike strategically coordinates its television and print ads, sponsorship, Web site, an 800 number,
billboards, and other media to form an effective mix of communications. The athletes who deliver its
message are a major factor.A number of famous athletes who promotes Nike are basketball players
Michael Jordan & Nolan Ryan ,tennis players John McEnore and Andre Agassi., football’s Deion
Sanders, track stars Carl Lewis and Alberto Salazar, and basketball players Charle Barkley and Scottie
Pippen. The young Tiger Woods has a $100 million contract with Nike. The charisma, talent, expertise,
and personality of such athletes deliver Nike’s message. According to its Web site. Nike exits to be the
best sports and Fitness Company in the world. We are here to inspire and motivate the athlete in all of us
and advocate the love of sports. We live in the heart of sports and the athletes who play them.

And Nike is expanding its total market with integrated marketing communication. It is founder of
P.L.A.Y. (Participate in the Lives of America’s Youth), a multimillion-dollar program to promote
healthy, active lifestyle among young people. There is also Niketown stores feature basketball courts
where customers can try out shoes, multiscreen televisions to display Nike promotions, and appeal
autographed by Nike athletes.

With the growing popularity of the WNBA, women’s soccer, and such prominent female Olympians as
Marion Jones. The interest in women’s sports and fitness is at an all-time high. Nike has already seen the
positive impact of this women’s movement through such successful initiatives as “shop-in-shop”
concepts in women’s sections of U.S. department stores, women’s retails in Japan and women’s focused
Web site sales in Hong Kong”. When the Nike was launched 28 years ago, a mere one in 30 school aged
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girls were involved in sports. Today that number has jumped to one in five and Nike is at the forefront
in sponsorship and involvement in supporting women in sports.

NIKE’S ONLINE BUSINESS

(Branding across an online network)

CHALLENGE

Target different online audiences around the world, with different products, while maintaining core
brand identity in a network of sites. Extend the brand experience from a 30 second TV-spot to
something that's much deeper.

STRENGTH

Nike has a tradition of strong graphic identity, enormous brand awareness. They are the undisputed
heavyweight champions of branding. They admit they're not in the apparel business; they're in the image
business. From Tiger Woods to Michael Jordan, Nike surrounds itself with winners. Their print and TV
ads are legendary for their sophistication, wit and execution. In a sense they strive for something close to
perfection in crafting a message that's irresistible.

A NETWORK OF TARGETED MICRO SITES

Unlike its rival companies, Nike presents itself to many different audiences in different ways. It's a
marketing strategy born from a sophisticated understanding of how people respond to images of
lifestyle. Whereas most companies develop products for an existing market, Nike tries equally to create
the image first and then respond to the market that emerges.

But devising a tactic to pursue niche markets is something not solved with a one-size-fits-all design
approach. If your business were going after myriad audiences, it would be nearly impossible to satisfy
the needs of all customers under one umbrella mega-site. The web is not a mass marketing engine. It's a
place to begin one-to-one conversations with your customers. Male street basketball players are not
likely to identify with the same site content as female tennis players. Each Nike product has a particular
group of potential athletes in mind. Each Nike site goes after those target groups, first beginning with
the country, then the sport, i.e. NikeGolf.com, then with marketing content and products. Using similar
structure, color, grid and logo treatment, Nike has created a cohesive identity across the network, but
with relevant individuality to the target audience.

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THE SWOOSH REMAINS THE SAME

Though it is only about 30 years old; there are few other symbols more recognizable around the world
than the Nike Swoosh. Its form is simple and swift. It's meaning built masterfully over the years with
billions of dollars of products, advertisements and research. Like a famous signature, it has earned a
unique right to identify something as special — whether it's a pair of running shorts or a For such an
elegant shape, the Swoosh carries a lot of weight. It is not a logo that is dressed up in lot of colours,
showing up mostly in black or white. Nor does the logo change often, unlike the stylistically driven
Alfred A. Knopf dog. That it's strength. Keeping the Nike Swoosh conservative and consistent allows it
to become a unifying device across channels such as TV, print or Web, which tend to be anything but
that.

Such an approach gives the logo a status nearly approaching reverence but with versatility. This has
been used to great effect in many Nike TV spots. The Swoosh can be at once seen as a symbol of ultra-
cool punctuating the end of. Or it can be seen as deadpan funny when it appears after Lance Armstrong
has resuscitated a fallen elephant.

On the Web, Nike uses its logo small and usually in the upper-left or lower right corner of their pages —
quiet but confidant. But the Swoosh is about the only thing stays constant.

It's not unusual for Nike to completely gut its NikeTown stores for a new look every 18 months. If their
stores are that malleable, imagine the amount of change to their sites. Regardless of this constant
change, the Swoosh will always remain the same.

A CONSISTENT STRUCTURE

To embark on a strategy of creating as many sub-sites as Nike does requires more than a great logo to
succeed. It requires a strong graphic identity and skill. Nike is adept at not only sniffing out popular
cultural trends and desires but creating them as well. And to engage it's multifaceted audience to its
many lifestyle images — such as "Ballers" or "Everyday Athletes" — Nike has turned to the Web and
begun to create fine-tuned micro sites.

The content on each site is unique and typically bathed in widely diverse color schemes. To anchor the
designs, Nike keeps most pages neatly framed with gray bars holding similar elements like teasers to
new sneakers or contests. Pages are designed with a modular approach in mind allowing elements to be

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mixed and matched. Such structural cues can also provide an easy out for the confused or disinterested
user.

CUSTOMIZATION ON WEB

Nike's site offers us an interesting idea when it comes to designing an online identity — make the site
visitor the hero. Don't just shower them with unearned praise, challenge them to learn, provide them
with the tools and information to decide and act for themselves.

This can be as simple as adding some customizable elements or more challenging such as letting them
re-edit a famous commercial. Allow users to reveal what's important to them and why. The act of
opening a dialogue is sometimes reward enough. Nike takes our ideas of beauty, grace, speed or sex and
tells them back to us in their own way. But if Nike were to simply plaster these symbols on a web page,
they would remain merely abstractions and pretty boring.

Nike's real design skill is making these ideas represent some greater concept, which is powered by the
emotional and intellectual stock we're willing to bring to it. How do they do that? By using design,
symbolism and coherence to stir up the most seductive idea to date- that there's a hero within you.

THE VALUE CHAIN:

The value chain of Nike starts with manufacturing of its products in locations where it could take the
advantage of low manufacturing cost. After that value is added at every stage from its manufacturing to
its delivery. Thus, the amount of value delivered to the market place is dependent on the cost of Nike’s
raw materials, its ability to deliver products efficiently to retail outlets, the effectiveness of its research
and development, and many other activities affect the overall quality of the goods and services the
company can provide to its customers. Even the qualities of the ads for Nike are important, since the
image of the product for users is largely by the ads.

NIKE IN UNITED STATES MARKET

During fiscal 2003, sales in the United States accounted for approximately 49 percent of total revenues,
compared to 53 percent in fiscal 2002 and 54 percent in fiscal 2001. Nike sell to approximately 18,000
retail accounts in the United States. The NIKE brand domestic retail account base includes a mix of
footwear stores, sporting goods stores, athletic specialty stores, department stores, skate, tennis and golf
shops, and other retail accounts. During fiscal year 2003, our three largest customers accounted for
approximately 27 percent of NIKE brand sales in the United States excluding sales from NIKE Golf and
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Bauer NIKE Hockey, and 24 percent of total sales in the United States. They make substantial use of our
“futures” ordering program, which allows retailers to order five to six months in advance of delivery
with the commitment that 90 percent of their orders will be delivered within a set time period at a fixed
price. In fiscal year 2003, 91 percent of our U.S. footwear shipments (excluding Cole Haan, Bauer,
Hurley and NIKE Golf) were made under the futures program, compared to 92 percent in fiscal 2002
and 86 percent in fiscal 2001. In fiscal 2003, 67 percent of our U.S. apparel shipments were made under
the futures program, compared to 69 percent in fiscal 2002, and 67 percent in 2001. They utilize 19
NIKE sales offices to solicit sales in the United States. They also utilize 11 independent sales
representatives to sell specialty products for golf, cycling, water sports and outdoor activities. In
addition, they operate the following retail outlets in the United States.

MAJOR COMPETITORS IN USA

Adidas-Salomon AG :

Jesse Owens and Muhammad Ali broke barriers and records in adidas athletic shoes. The heart of the
adidas Salomon Product line is athletic shoes, including tennis, running, and basketball, but the three
stripe logo appears on apparel and other jock type accoutrements. Bankruptcy once had adidas-Salomon
on the ropes, but it made a comeback by shifting production to Asia and beefing up its marketing
budget. The # 2 maker of sporting goods world wide, behind NIKE, adidad-Salomon owns sponsorship
deals with popular US football and basketball stars, as well as the New York Yankees. Its purchase of
Salomon, the French maker of ski and golf gear company into the equipment arena.

Reebok International Ltd.:

Reebok International feels comfortable stepping out onto any surface. The company has long been at
home in sporting arenas and is the # 2 US maker of athletic shoes, behind Nike. In addition to Reebok
sportwear and accessories, Reebok sports the Greg Norman line of men’s casual wear, Rockport
walking and casual shoes, Ralph Lauren and Polo dress and athletic shoes, and Weebok shoes for small
fries. It runs more than 205 retail stores. Reebok still sponsors some sports stars (Allen Iverson, Venues
Williams), but in yet another marketing maneuver, the company is taking strides to become more
fashionable. CEO Paul Fireman and his wife own about 25% of the company.

FILA USA, Inc. :

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After tripping over a few hurdles, Fila is feeling better. Initially earning a reputation for its high design
and style in athletic shoes and sportwear, Fila ran down its fashionable image in liew of a hodgepodge of
athletic endorsements. After selling off smaller parcels of its athletic division, in 2003 Fila’s owner,
RCS Media Group (Formly Holding di Parteicipazion), threw in the towel n sporting goods and crossed
the finish line on a sales deal with newly-created Sport Brands International (Associated with private
investment fund manager Cerberus). The resulting Fila remains intact and intends to grow into its role in
the sportwears arena.

STRATEGIES OF NIKE

LOW COST MANUFACTURING STRATEGY

Nike products are manufactured in factories owned and operated by other companies. This outsourcing
helps the Nike to take the advantage of low manufacturing cost. . Its major manufacturing countries
includes: China, Indonesia, Vietnam, Thailand, Italy ,Taiwan ,South Korea .

For eg In fiscal 2003, approximately 1 percent of total NIKE brand apparel production for sale to the
United States market was manufactured in the United States by independent contract manufacturers,
most of which are located in the southern states. The remainder was manufactured by independent
contractors located in 35 countries.

PRODUCT RESEARCH AND DEVELOPMENT

Their research and development efforts are a key factor in their past and future success. Technical
innovation in the design of footwear, apparel, and athletic equipment receive continued emphasis as
NIKE strives to produce products that reduce or eliminate injury, aid athletic performance and maximize
comfort. In addition to NIKE’s own staff of specialists in the areas of biomechanics, exercise
physiology, engineering, industrial design and related fields, they also utilize research committees and
advisory boards made up of athletes, coaches, trainers, equipment managers, orthopedists, podiatrists
and other experts who consult with us and review designs, materials and concepts for product
improvement. Employee athletes wear-test and evaluate products during the design and development
process.

SEGMENTATION

Nike has segmented its market on the basis of the following variables:

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• Demographics

Age :- Youth

18-34

Older

Gender :- Male

Female

• Psychographics:

lifestyle Athletic

Outdoor

Nike has designed and marketed athletic shoes for each different sport, often further segmenting
with specialized models within each sport (e.g., "Air Jordan" basketball shoes, and additional
basketball models called "Force," represented by Charles Barkley and David Robinson, and
"Flight," represented by Scottie Pippin).

TARGETING

Initially, Nike focused more on the male consumer and was dedicated to serious athletes. But,
with the growing popularity of female sports apparel and equipment segment , it has widen its
target market. It has moved into new sports areas away from the running heritage. As a result of
which, it’s target audience has shifted from more masculine towards female and even third agers.

POSITIONING

Nike’s Punch line “Just do it” has enabled the company to create the image of an aggressive,
action-oriented company. Amateur as well as professional athletes perceive Nike as producing
high-quality shoes that help athletes perform to their maximum potential. They were firmly
rooted as performance shoes with innovative designs and technology. Also Nike’s number one
position was due in part to its product positioning.

BRANDING

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Symbol as a brand: The most important aspect of a brand's name and symbol is that it silently
speaks everything about the company or product. Nike is the best example of how a symbol is
best utilized and exploited and its strong association with the products. Nike is symbolized by a
tick mark or something which is always right. The business card of a Nike employee has a tick
on it instead of the company name and still people make out the company where the person is
employed just by looking at the tick

Brand Extension: Nike has turned sneakers into something more – athletic tools. Over time,
many consumers have developed a mindset about the difference between Nike sneakers and any
other brand of sneakers. Now, many years later, Nike is exploring line extensions into other types
of clothing and footwear to bolster its brand against changing demographics and lifestyles

Brand Narration: Nike do not yell at the consumer to buy, buy, buy. They instead engage them
in a narrative that makes the consumer want to buy because they identify with narrative
components. Nike’s brand narrative prescribes the consumer to get out and exercise, “Just Do it”.
Buying Nike product is almost an after thought.

ADVERTISING STRATEGY:

Nike traditionally uses a highly visual format for its advertisements. These images capitalize on
consumer emotion and attempt to link personal value to the wide array of Nike products. Advertising
is never just about Nike, the brand. It is carefully constructed to draw in consumers. In one recent
campaign, famous Nike-sponsored athletes showed their wounds from competition, including scars,
missing, fingers, and knocked-out teeth. By doing so, Nike connected its own products with the
physical and emotional side of athletic competition. Besides this, the Nike swoosh symbol is a highly
recognized trademark that elicits these desired effects because it is an episode encoded in the
consumers brain. The athletes who deliver its message are a major factor responsible for promotion
of the brand. For example, Michael Jordan is generally considered to be the best basketball player in
the history of the game. At a time when Nike profits were sinking, Knight selected Jordan to re-
establish the company’s image. Approximately 35 ads later, Jordan was the most popular athlete in
the country, according to New York based marketing Evaluations. A number of other famous athletes
have elicited a tremendous response from customers. Including tennis players John McEnore and
Andre Agassi, basketball player Nolan Ryan., football’s Deion Sanders, track stars Carl Lewis and
Alberto Salazar, and basketball players Charle Barkley and Scottie Pippen. The young Tiger Woods
has a $100 million contract with

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Nike. The charisma, talent, expertise, and personality of such athletes deliver Nike’s message.
Nike has also expanded its marketing methods by teaming with MTV2 to produce street
basketball series.

GAINING POWER FROM COMBINING STRATEGIES

With the benefits of improved performance, linked to aspiration of becoming a top athelete at
various target user groups , together with emotion in advertising materials and athlete
endorsement, Nike have enhanced its position in the footwear industry.

NIKE IN EUROPE

NIKE’S EUROPEAN HISTORY

The same year that Nike overtook Adidas as the number one athletic shoe company in the U.S. --
1980 -- Phil Knight dispatched five employees to Europe to establish a presence for the U.S. shoe
manufacturer there. Because of its favorable tax and business operation laws, the group set up an
office in Amsterdam and began its mission to establish the Nike name and brand. Though Nike
had succeeded in breaking Adidas’ dominance in the U.S., taking over as the leader in Adidas’
home arena would be a greater challenge.

INITIAL GROWTH

In the early 1980’s, the most popular sports in Europe were soccer, track and field, and tennis. If
Nike wanted to have a significant presence in Europe, the company would have to establish its
name in each of these sports in each of Europe’s four primary markets -- Germany, France,
England and Italy -- which accounted for the bulk of the European sports shoe and apparel sales.

Besides these difficulties with their marketing intermediaries, Nike faced formidable competition
in Europe. Adidas, the German shoe company, dominated the European sports market. Together
with Puma -- a spin-off of Adidas -- the two companies controlled over 75% of Europe’s athletic
shoe and apparel market. For decades, the two companies had developed the grassroots
allegiance of local sports teams, particularly soccer, track and field, tennis, and rugby. Both had
endorsement contracts with top European athletes in each of these sports and sponsored many
local teams in cities and towns across Europe. Adidas, in particular, was respected for the quality
of its shoes and had earned the reputation as the European performance brand. For any company

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to establish a presence in Germany -- Europe’s largest market -- in the face of these two
companies was considered nearly impossible.

Years, Nike struggled to build its presence in Europe. By the end of 1987, Nike’s European
revenues had grown to $150 million, representing 5% of the European athletic shoe market and a
growing percentage of Nike’s revenues. Compared to its U.S. position, however, Nike’s
penetration of the European market was comparatively insignificant. Perhaps even more
disturbing to Nike was its inability to control the growth of its brand. In most countries, the Nike
distributor who controlled marketing and advertising rights were not necessarily highly
motivated to sell Nike’s. To overcome this limitation -- but still maintain its quality image --
Nike restricted its product line to primarily high-end, higher priced shoes. In doing so, the
company forfeited volume and hence market share. Though the company also sold some low-
end, relatively inexpensive shoes, it had no product offerings for the expansive "middle market."
As a result, many European consumers saw Nike as an aggressive, expensive American brand.

Because Nike distributors controlled advertising in their local markets, each continued to develop
their own interpretation of the Nike brand and identity programs. While Nike productively
embarked on the “Just Do It” umbrella campaign in the U.S., Grey Advertising -- the agency that
managed the Nike account in five countries -- was developing separate, and not necessarily
reinforcing, ad campaigns in each European country. Nike also did not have the same means of
displaying their shoes and retailing them to customers as in the U.S. -- athletic shoe specialty
stores did not really exist in Europe.

In the German market and, to a lesser extent, the French market, the result was that Nike was
pushing product into the marketplace rather than creating demand from the bottom up, resulting
in frequent close-out sales with discounts of up to 35%. After a couple of seasons, the
marketplace was saturated with close-out product, and forecasting problems led Nike to “choke
in inventory” in 1993, according to Martin Coles, Vice President and General Manager for
Europe. Coles took over as GM of Europe just as Nike’s sales took a downturn after peaking at
$1.1 billion in 1993.

Without question, Europe represented a tremendous growth opportunity for Nike. Moreover, as a
general rule, Europeans were slower to embrace sneakers as off-court shoes and were more likely
to wear fine leather shoes even in casual settings. Either on or off the court, Europeans just
needed fewer athletic shoes. The image of athletic shoes was changing, however, and sneakers
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were no longer a dead giveaway that a person was more likely than not to be an American tourist.
Youths especially seemed captivated by the “American” image of Nike and Reebok. As a result,
some progress had been made in Europe. Adidas -- with over $1.5 billion in revenues -- still had
more than double the market share of Nike in Europe. Though Adidas still dominated the
European market, Nike made significant inroads, and the German giant and its counterpart,
Puma, had lost market share to Nike and Reebok.

To realize its goal of being the number one sport and fitness company in the world, Nike had to
dominate Europe. Its two main competitors, Adidas and Reebok, posed very different challenges.

Building on the success of its “Just Do It” campaign in the U.S., Nike attempted to introduce the
tag line into its European advertising in the Spring of 1993. Nike hoped that this campaign would
successfully communicate Nike’s core values of authenticity, performance and athletics, and help
establish an emotional connection with European consumers through sports. Nike allocated $80-
$100 million to European advertising and promotion. Four commercials showing professional
athletes engaged in competitive sports were translated and shown in 52 local markets. The
European consumers, however, found them intimidating, aggressive and unreachable. To reach
its growth goals in Europe, Nike needed to find a way to change consumers’ perceptions of Nike
as an expensive, aggressive American brand.

FOCUSING IN EUROPE

The first thing Coles did to turn around Europe was to gather the European management team,
which included the functional heads at the European regional headquarters in the Netherlands,
plus the General Managers from each of the Nike-owned European countries. The group
discussed what had gone wrong, without hiding behind reasons like the recession, bad weather,
and the failure to catch on with brown shoes when they hit the market.

The team expanded the set of reasons for the sluggishness in the European market. Nike had
focused on volume sales of components like T-shirts, fleece and shorts rather than their technical
and performance oriented product. Performance was what differentiated Nike from their
competition, but Nike had not used performance in their positioning. Instead, the company had
been following closely what Reebok and Adidas were doing, and had tried to fight the
competition instead of having confidence in their own brand. Operating each country as an
independent unit had led to fragmented efforts.

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EUROPEAN MARKET CONDITION

European environmental conditions have not changed much since Nike entered the market in
1980. The liberal business environment has remained. The region is regulated with strong social
laws. While some smaller countries enjoy more favorable tax laws, conditions in general have
been relatively stable, even through bull and bear markets. The region has strong intellectual
property protection and contract enforcement laws. This makes the European market a highly
favorable place for Nike to enter in light of the distinctiveness in language and some cultural
differences. Germany, France, Italy, and Spain accounted for the bulk of the European sports
shoe and apparel sales.

Currency fluctuations in overseas markets are inevitable. Nike’s profit margin was hurt by the
strong U.S. dollar against European currencies in the 1990’s.

COMPETITION

Adidas and Puma

Besides the difficulties with its marketing intermediaries, Nike faced formidable competition in
Europe. Adidas, the German shoe company, dominated the European sports market. Together with
Puma, a spin-off of Adidas, the two companies controlled over 75% of Europe’s athletic shoe and
apparel market. For decades, the two companies had developed the grassroots allegiance of local
sports teams; in particular, soccer, track and field, tennis, and rugby. They both had endorsements
contracts with top European athletes in each of these sports and sponsored many local teams in cities
and towns across Europe. Adidas, in particular, was respected for the quality of its shoes and had
earned the reputation as the European performance brand.

Reebok

Reebok sold its shoes direct to retailers through seventeen independent sales organizations.
Reebok followed a limited distribution strategy. Its shoes were sold only through specialty
athletic retailers, sporting goods stores, and department stores. With the exception of Britain,
Sweden, and Denmark, Reebok had relatively little success in Europe.

DISTRIBUTION CHANNEL

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Before 1980s, Nike distribution strategy of sports footwear & clothing in Europe - work through
distributors & select local partners in each country. In 1980s, due to market growth, Nike decided
to buy up its distributors & converted them into wholly owned subsidiaries But each distributor
operated autonomously, each local warehouse had its own logistics infrastructure & its own sales
force, ordered Product individually & controlled their own stock. Distribution and product
delivery to the customer also requires a global level focus, as competitors exist globally and in
order to compete effectively, your product must be available within the same competitive
markets.

Centralizing European distribution: In 1992, Nike decided to reduce no. of its warehouses in
Europe from 22 to just one in Belgium. The European Distribution Center (EDC) receives. Nike
products from all over the world & serves retail store across Europe.

SEGMENTING

One of the problems Nike had in Europe was that only a limited part of the company’s product
line was offered to retailers in each country. Each country would make a different selection based
on their perceptions of the local consumer and the size of their warehouse, resulting in widely
differing Nike offerings across Europe. An interesting case was the Air Max B/W, a great
running shoe that sold well in the UK and France. The shoe was not offered to the German trade
because the German team didn’t feel it was right for their marketplace. Interestingly enough,
Foot Locker, which had a global account, was able to offer the Air Max B/W in their German
stores, and it was the hottest selling shoe on the shelves. The perception that the German
consumer was different was just not correct.

TARGETING

Nike needed to start understanding that their consumers really were, and to look for similarities
rather than differences that existed between countries. European youth, which was Nike’s target
audience, were probably more connected than people realized; kids in the U.K., the Nordic
countries and Germany listened to the same music, they loved the same sports, and they admired
the same sports stars.

Nike decided that they had to offer a complete product line to the whole European market. The
product line was pared down to a common European line. A centralized distribution center was
built in Belgium to service the whole European market, replacing 30 warehouses around Europe.
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A new ordering system was implemented by tapping into Nike’s U.S. computer system, to create
not only European compatibility but U.S. compatibility as well.

The goal was to give consumers the same experience of the Nike brand throughout Europe. Nike
would concentrate on the same categories around Europe—soccer, running, basketball and tennis
—and the same age groups. The same basic marketing message would be used, although there
was more latitude in localizing advertising copy, which was often difficult to translate across
cultures. Finally, Nike would focus on technology and performance. It was important both that
the company delivered a product benefit in everything they did, and that they explained the
benefit to the consumers. The F.I.T. technologies in apparel, for example, provided superior
performance through advanced materials.

POSITIONING: Powerful Associations with Athletes

To overcome the fashion image, Nike started from the bottom and developed the Nike brand in
sports relevant to the European market, especially soccer. A grassroots approach was needed to
build credibility and convince consumers of the authenticity of the Nike brand, and Nike got
more actively involved as sponsor of soccer youth leagues, local clubs and national teams. One
of the events that Nike sponsored was the Premier Cup, an under-14 European soccer
tournament. Another was the Tour de France cycle race.

In many cases, Nike could use their global stars for category-specific advertising: for example,
Michael Jordan was relevant to consumers around the world. However, Nike also needed athletic
endorsers who were locally relevant. Using local sports heroes was problematic; many of them
were unknown outside their home country, and would not be effective in pan-European
campaigns. Nike wants to establish itself as a perfect sports brand.

Nike was positioned as an authentic sports brand with a track and field/running heritage; in
Germany, Holland, France, Spain and Italy, Nike was very much a fashion brand, and that image
had spilled over into Denmark. The different brand perceptions had been a result of different
marketing strategies.

CAMPAIGN

In the UK and the Nordic countries, Nike had focused on grassroots work, and had a strong
presence at sports events and with athletes. In Germany, on the other hand, marketing was almost

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exclusively advertising—99% of the marketing budget was spent on TV, video, cinema and
radio, and almost nothing on sports promotion. Nike’s advertising was a mix of U.S. campaigns
and local work. In some of the campaigns, Nike had come across as too aggressive. They were
too American, and were pushing athletic competition too far for their European audience.

MARKETING STRATEGY:

An important part of the new strategy in Europe was to change the relationship with retailers.
Nike wanted to grow the proportion of its business with the larger, specialized sports retailers,
and shrink the proportion of business with smaller, mom and pop stores. The sports retail trade in
Europe was not as developed as that of the U.S., but this was changing as people began to realize
its potential. Retailers like JD Sports in the U.K. and Stadium in Sweden used some sophisticated
merchandising concepts, and U.S. chains like Foot Locker had established a presence. Nike also
wanted to move out of the transactional mode and start dealing with their key accounts like
business partners. Coles described the new relationship:

Instead of Nike walking into the store and asking “What would you like to buy today?” the Nike
salesperson would say: Here’s what we’re going to sell through your store this season, here are
the product types, here’s how we’re going to merchandise the product types, here’s the marketing
effort that’s going behind it, here’s the athlete that’s going to be wearing that product by this
date, and here’s the new color product that we’re going to flow in by the second half of the
season. What we come up with is a totally integrated marketing plan.

Nike worked with their key accounts to help them understand concepts like multiple season
selling (the introduction of product throughout the year rather than just in two seasons),
assortment planning (selecting product depending on the type of store), and the Futures program.
In 1993, the Futures program was introduced in Europe; the program asked the retailers to order
the bulk of their product six months in advance, and in return, promised them guaranteed
delivery and a discount of 5-13%. Initially, the program did not go over well with retailers,
especially in Germany where retailers could buy product from Adidas at any time. However,
most of them saw the advantages once Nike explained to the European retailers why they were
using Futures and how it would guarantee availability. Germany was the exception, where it was
a battle both against an entrenched retailer base and sometimes against Nike’s own staff, who
didn’t believe in the concept themselves.

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The result of the increased coordination and the spreading of best practices throughout Europe
has been a stronger organization. People now feel as though they are part of a larger
organization, sharing the Nike culture of teamwork, competitiveness and honesty. They are more
confident as their competency increases; they understand the brand; they understand how Nike
talks about profitability; they can read an income statement; and they are in control of the
technologies that Nike uses.

Key Success Factors and Critical Issues

Key success factors of Nike are:

One of a kind- It provides unique value to customers having its own look/ custom products. We
know you- It knows as well as understand people’s stories/ understand athletes needs Access- Its
products are found everywhere
Design- It has recognizable, respected logo, shoe and clothing aesthetics Convenience- It has
online shopping, worldwide retailers.
Nike has successful growth collaborating with other companies within sport and other fitness
industry.

Having Stylist features and innovative products which includes;

" Different colors and designs of products
" It have different products one cannot fit other.
" It has silent alarm, water proof products, and sleep monitoring of
its products
" It is having wireless syncing (android device)

Financial sustainability of Nike comprises of;

" Strong history of alliances as having strong partnership with Apple. " It has high budget in
marketing.
" Having ability to develop new and innovative products in house with minimal risk.
" Nike was the first one in the market in terms of experience and Technology.

Having successful business growth in terms of internal and external analysis, market position,
competitors, products and organizational structure.
The success lean to three things; Leadership, people and processes which provide quality
products timely (Nike.inc., 2014).

Key critical issues

One main issue of Nike corporation is it is leading and planning without proper
management, the company is suffering from child hood labor.
It has negative media attention due to which it may lose reputation.
Has fault of poor factory conditions and environmental problems.
It has been blamed of abandoning sites.
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The Nike products have become equal with slave wage, they only pay worker with minimum
wage from which they can only fulfill their basic necessities, forced overtime and subjective
abuse.
Suppliers are having overlapped and conflicting issues from diverse customers so can be issue for
Nike outsourcing strategy. (Wilsey, M., & Lichtig, S.)
Marketing Strategy.

RESULTS

Measured as Brand Intent to Purchase, Nike is the leader in almost all age groups against both
Reebok and Adidas (the exception being older women, where Reebok is on top). Nike considers
Adidas its strongest competitor, but Reebok has also had some placement success with products
such as the DMX shoe. Fila looks to be fading, although Hilfiger and Polo are new entrants
focused on the fashion side. Nike’s goal is to bring Indian consumption to the same level as the
other Asian countries.

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 CHAPTER-5

DATA ANALYSIS AND INTERPRETATION

1. Do you like Nike footwear products? Why or Why not?

(a) Yes
(b) No

The following results were observed:

a) 88.4% people said Yes

b) 11.6% people said No

INTERPRETATION

Therefore, it is observed that most of the respondents like NIKE products

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2. Did you buyed nike footwear products?

(a) Yes
(b) No

The following results were observed:

(a) 92% people said Yes

(b) 8% people said No

INTERPRETATION

Therefore, it is observed that most respondents have buyed Nike footwear

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3. Why do you buy nike footwear product?

(a) High quality

(b) Brand +Trendy pursuer
(c) Other

The following results were observed:

(a) 36% people said High Quality

(b) 62% people said Brand + Trendy pursuer
(c) 2% people said others

INTERPRETATION

Therefore, it is observed that most People buy Nike footwear because Of its Brand
and Trendy looks

4. What type of sports do you like?

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 (a) Soccer
(b) Basketball
(c) Running
(d) Other

The following results were observed:

a) 28% people said Soccer

b) 42% people said Basketball
c) 17% people said Running
d) 13% people said others

INTERPRETATION

Therefore, it is observed that Basketball is the most likely sport.

5. If you want to buy a sports footwear, which one is your best choice?
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 (a) Nike
(b) Reebok
(c) Addidas
(d) Others

The following results were observed:

a) 32% people said Nike

b) 34.2% people said Reebok
c) 24.6% people said Addidas
d) 9.2% people said others

INTERPRETATION

Therefore, it is observed that Reebok is the most demanded footwear

6. What kind of nike products do you buy?

(a) Footwear
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 (b) Clothes
(c) Accessories
(d) Other

The following results were observed:

a) 48% people said Footwear

b) 46% people said Clothes
c) 4% people said Accessories
d) 2% people said Others

INTERPRETATION
Therefore, it is observed that most saleable item of Nike is Footwear

7. Do you think prices of nike footwear is expensive?

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 (a) Yes
(b) N

The following results were observed:

a) 58% people said Footwear

b) 42% people said Clothes

INTERPRETATION

Therefore, it is observed that most people think Nike footwear is Expensive.

8. Where is the best place to reach you with Nike advertisement?

(a) Television
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 (b) Newspaper
(c) Magazine
(d) Internet

The following results were observed:

a) 68% people said Footwear

b) 8% people said Clothes
c) 19% people said Accessories
d) 5% people said Others

INTERPRETATION

Therefore, it is observed that Television is the most reachable Medium

9.How often do you buy nike products?

(a) Daily
(b) Weekly
(c) Monthly

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 (d) Yearly

The following results were observed:

a) 0% people said Daily

b) 0% people said Weekly
c) 14% people said Monthly
d) 85% people said Yearly

INTERPRETATION

Therefore, it is observed that people buy Nike products once in a Year.

10. How many times do you watch nike TV adverstisment in one month?

(a) 0 times
(b) 1-5 times
(c) 6-10 times
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 (d) 11-15 times

The following results were observed:

a) 56% people said 0 Times

b) 34% people said 1-5 Times
c) 6% people said 6-10 Times
d) 4% people said 11-15 Times

INTERPRETATION

Therefore, it is observed that people haven’t watched

Nike Advertisment in a month.
CHAPTER-6

RESULT & DISCUSSION

Nike has been creative since the start. It has been pushing the technological boundaries of innovation
to offer its customers new products and also differentiate itself from its competitors. Somewhere in its
evolution, Nike also realised the importance of hi-tech gadgets in day-today lives.

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So it started to combine new products with hi-tech solutions to give unconventional capabilities to
a customer of sportswear.

Nike was also quick to seize the opportunity offered by social media to engage with a wider
customer base so much so that it is now able to link its new hi-tech gadgets to social media
platforms. The power of such customer contact is phenomenal as it gives greater visibility in a
single click, generates interactions among customers and gives the company an opportunity to
collect info about customers' choices and preferences. It also gives endless chances for
customer segmentation and product differentiation, the pillars of any marketing strategy.

Measured as Brand Intent to Purchase, Nike is the leader in almost all age groups against both
Reebok and Adidas (the exception being older women, where Reebok is on top). Nike considers
Adidas its strongest competitor, but Reebok has also had some placement success with products
such as the DMX shoe. Fila looks to be fading, although Hilfiger and Polo are new entrants
focused on the fashion side. Nike’s goal is to bring Indian consumption to the same level as the
other Asian countries.

CHAPTER-7

SUGGESTION & RECOMMENDATION

SUGGESTION
Department stores are the prime sales and marketing channel for leather consumer goods. In
addition, store decorations and product displays should be designed to create a strong first
impression. Seasonal promotion campaigns, like special discounts and advertisements, could

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be employed. New lines of collections should be introduced for festivals.

In addition to promotional activities in shopping malls and department stores, discounts and
TV commercials are considered effective channels for promotion. It is advisable to pay
attention to the affordability of customers in different cities, while setting price points for
different product categories. Meanwhile, leather shoes offer better growth potential.

Popular materials used for leather consumer goods include bovine skin, goat/kid/lamb/sheep
skin and crocodile skin. Regarding colors, black is by far most sought-after with dark brown
in second place.

Due to their growing spending power, the rising middle class should be the target of Hong
Kong's sellers of leather consumer goods. Hong Kong companies should put more emphasis
on products for business use. In addition, it is useful to introduce appropriate designs that
cater for the tastes of the middles class.

Double Click 2006 Consumer Email Study October 2006, the fourth of Double-Click annual
consumer email studies points to an increasing sophistication in consumer usage of email
functionality and a corresponding complexity of purchasing behavior. The Spam crisis
continues to affect consumer behavior online but does not necessarily cloud consumer
receptiveness to legitimate marketers: an overwhelming majority of online consumers receive
offers by email and have made a purchase online or offline as a result. Consumers are using
available tools to limit spam and are employing operate email accounts for purchasing, all in
attempts to increase control and improve their email experience. Working with Beyond
Interactive and the NFO//net source panel of 900,000 US consumers, polled 1,000consumers
via email from July 30 - August5, 2007. All respondents recruited use email/internet 1+ times
per week, which reflects the usage of the larger online population (94% of the 18+ online
population according to Nielsen, 2006).There was an equal segmentation of men and women
and the average age was 42.7.This is the fourth of an annual series of consumer research
studies and trending information was derived using the data from previous years. The sample
mirrored previous studies and is reflective of the online population as a whole.
Key Findings The majority of consumers receive some kind of marketing email with special offers
from retailers most common Sender recognition most impacts operates, while content relevance
increases likeliness to purchase Frequency ascertain category, are very specific to the category of
email but vary greatly from one consumer to the next; frequency of permission based email is
clearly a great concern to consumers and has an impact on what they consider to be Spam. Email
drives multi-channel purchases and has an immediate as well as a latent Nearly 64% of consumers
cite the line as the most important factor in opening an email.2006

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Consumer Email Study impact. It drives consumers most often to the online channel but also
results in retail and catalog sales. Consumers have become sophisticated in their use of ISP-
supplied tools to limits Pam and in their usage of various email addresses to manage their varied
email activities Home and free email addresses are most often used for purchasing, within email
address specifically designated for that usage. Men and women have radically different ideas of
what spam is and different purchasing behavior related to Spam. Women are more receptive to
promotions and discounts and correspondingly more interested in and tolerant of marketing emails
than men. Receptiveness to Marketer Emails. The vast majority (91%) of consumers receive some
form of permission-based email with 57.2% receiving special offers from online merchants, 55.4%
receiving them from traditional retailers, and 48.5%receiving them from catalogers. Other popular
types of marketing emails included account statements/online bill payment information (received by
49.8% of respondents), travel emails (43.3%), coupons for groceries (40.0%), health (41.1%) and
household tips/recipes/crafts (42.1%). Of categories in which consumers do not currently receive e-
mails, respondents are most interested in receiving grocery coupons (cited by 22.1%) and
household tips/recipes/crafts (13.6%).Other categories of strong interest were electronics and
computer software/hardware, 13.8% and apparel/shoes at12.3%. Permission-based email also
continues to be the preferred method of contact from the favorite retailer regarding new products,
services or promotions (preferred by 59% of consumers), while only 32.1% preferred direct mail.
Sender Recognition, Content Relevance Most Impacts Purchasing consideration behavior, the line
continues to be the most compelling reason to open permission-based email, cited by 63.3% of all
respondents, an increase from 59.9% in2005. This speaks to the growing significance of user
recognition of sender and the power of brands — even more important in an era of spam. Of all
types of subject lines, discount offers are the primary motivational factor for opening permission
based email (increased to59.5% of all respondents from 56.7% in 2007), while compelling news
and information fell from 57.6% of all respondents to 48.6% in 2006.Special offers from
retailers/catalogers received by at least 50% of respondents

When asked what most compelled them to take action on a permission-based email, product
I needed at the time, a reflection of the relevancy of the offer, was noted by37.8% of all
respondents, outranking the next most common choice, special offer or discount, cited by
35.0% of respondents. Likeliness to respond could be increased if an email contains relevant
information (noted by 67.3% of respondents) and contains information based on interests specified
to that company. Consumers found recommendations based on past purchasing behavior less
appealing (noted by only 28.1% of all respondents).Consumers clearly want a degree of control
over what marketers send them and would like their specified interests taken into account.
Consumers are also very specific in their frequency preferences, with news and weather most often
preferred daily, special offers from retailers, online merchants and

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catalogers most often preferred weekly, and account statements/bill payment communications
monthly. However, there’re significant numbers of consumers who vary in these preferences,
with just over20% of those who receive special offers and discounts from retailers, online
merchants and catalogers preferring the communications to come monthly. In accordance with
specified frequency statements, when asked what concerned them about their inboxes,
frequency of permission-based email was second only to Spam, cited by 42% of respondents.
This danger is even more pronounced considering only 28% noted frequency of permission-
based email as a concern in2006. Clearly marketers need to test for optimal frequency and
solicit customer preferences. Email Drives Multi-Channel Purchases But at the Expense of
Offline Retail Permission-based emails clearly drives purchases. Sixty-seven percent of
respondents received an email offer from a Consumers take action on emails corresponding to
product need Relevant content, information specified by user increases likeliness to respond
2007 Consumer Email Study, Cataloger or online merchant that resulted in a purchase. Top
purchasing categories were: apparel/shoes at 83.4%making a purchase, computer
software/hardware at 81.4%, gifts/flower sat 77.6%, travel at 77.2%, electronics at77.1%
and food at 71.7%. The only under performing category was financial products and services at
41.5%, which could relate to the high consideration necessary for these products, the
incidence of spam in this category or lack of interest due to the economy. The channel
purchased in as a result of permission-based email is highly specific to the category of
product: travel had the highest incidence of online purchase at70% with only 13% purchasing
by catalog/phone/mail, while apparel/shoes had a relatively high incidence of online purchase,
58% with 41% purchasing via offline retail and 23% via catalog, and over the counter and
prescription drugs had equal levels of online and retail purchase at 32%.Email marketing
promotes use of the online channel. In comparing the typical channel purchase behavior of
respondents in a variety of categories to where they were most likely to purchase after
receiving permission based email, the results show that respondents are more likely than
usual to use the online channel for purchasing after receiving a permission based email; this is
true in all categories except financial services. In apparel/shoes, where 31% would typically
buy online, a permission-based email resulted in an increase of online channel usage to 58%,
gifts/flowers saw online channel lift from 45%to 61%, and electronics from 45% to 60%.For
consumers who receive email offers from retailers in the apparel/shoes category, email
marketing does increase use of the catalog channel. Of those who receive emails from
catalogers, 16% reported that they typically bought via catalogs. This number rose to 23%
saying they had purchased though a catalog after receiving permission based email. This
example illustrates the direct connection between catalog drops with effectively sequenced
email marketing used as a purchase driver. The Latent Impact of Email Marketing Most action
taken in response to email marketing does not result immediately from the click. While 27%
clicked through and made a purchase during that same online session, an even greater

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number, 33.6%, clicked through to find out more information, then purchased online at a
later date. An additional 12.2% clicked through to find more information and then purchase
offline through catalog or retail. Permission-based offers generate sales.

As was demonstrated by the great interesting discounts and special offers, email usage for
composing is on the rise and as offline thus latent impact as well. Seventy two percent of
respondents reported having used coupons or offer codes (an increase of 57% over the
46%who reported using them in 2007). Fifty-eight percent of respondents used the coupon or
offer code at an offline store. All of this latent activity resulting from email marketing demands
that marketers increase their own cross-channel sophistication in data capture: unless they’re
measuring both online and offline purchase activity, immediate and latent impact, they are not
capturing the full effect of their email performance. Consumers Become More Selective in their
Practices, Increasingly Use Tools to Limit SPAME mail volume as reported by consumers was
up but not markedly so (264 emails per week vs. 254 in 2007). Spam remained the number-
one concern about their email box, noted by 89% of respondents (consistent with last
year).The percent of email received that was Spam 56% was also consistent with2007. What
have changed are their opening practices: Only 27% opened 90% of their permission based
email, while about a third (30%) did so in 2007. In regards to what they are most likely to do
with Spam, an increasing number are deleting without reading (65% as compared to60% in
2007) and only 4% are reading to determine whether it is of interest (as compared to 5% in
2007 and 18% in2006). The likeliness of unsubscribe has declined markedly (from 33%
in2006 to 24% in 2007).

Perhaps consumers have gotten fed up or decided the activity was futile. When asked what
specifically they were doing to eliminate or limit spam, a vocal minority, 36.1% reported using a
Spam function of their email program, 15.9%downloaded spam filtering software and13.7%
created a secondary email addressor making online purchases. A key finding of the 2005 study had
been the usage of on average 2.6 email addresses per respondent. This year, respondents have
clearly become tired of the complexity of managing those accounts: this year, only 34% reported
having more than two addresses while44% reported having that many in
2007.Respondents seem to be consolidating, with an average number of accounts at2.3 in
2007.Latent impact: nearly 46% purchase online or offline some time after clicking through an
email With more than one in-box, what do consumers consider the primary address? Perhaps in
relation to the amount of job instability and the desire of having a more permanent address, the
home address was considered the primary one. Of those with multiple addresses, 74% had a
specific email address that they used for online purchasing, with either the home address (cited by
48.3%) and a free address (cited by 39.7%) as this purchasing address. Retail-oriented email
marketers clearly need to make special efforts at improving deliverability among

110
the major home ISPs and free email providers as this clearly will impact overall performance. Mars
& Venus: Men Really Are Different from Women in Respect to Email Marketing Two very specific
areas stand out in how men vs. women react to email marketing: men have a much broader
definition of Spam, while women are much more likely to be active purchasers as a result of
permission-based email. More men than women consider spam to fall into these very broad
definitions: 65% cited an email from a company that I have done business with but comes too
often while only 56% of women did so, 61% of men cited an email that may have been permission
based but comes too frequently while only 55% of women did so and 36% cited any email that
tries to sell me a product or service while 32% of women did so. Correspondingly, women are more
sensitive to emails of offensive subject matter (94% women vs. 91% men) .Active purchasers,
those who purchased in multiple product categories or from various types of companies (multi-
channel shoppers) after receiving an email, are more likely to be women than men. Aloof these
data points add up to online behavior that mirrors offline.

Women remain the primary household purchasers, 2007 Consumer Email Study
Respondents with multiple accounts likely to use a free one for online purchases Women
more likely to be active purchasers, multi-channel purchasers.

The fourth of Double-Click annual consumer email studies points to an increasing sophistication in
consumer usage of email functionality and a corresponding complexity of purchasing behavior. The
Spam crisis continues to affect consumer behavior online but does not necessarily cloud consumer
receptiveness to legitimate marketers: an overwhelming majority of online consumers receive
offers by email and have made a purchase online or offline as a result. Consumers are using
available tools to limit spam and are employing separate email accounts for purchasing, all in
attempts to increase control and improve their email experience. Objectives/Methodology Double-
Click, working with Beyond Interactive and the NFO//net source panel of 900,000 US consumers,
polled 1,000consumers via email from July 30 - August5, 2007. All respondents recruited use
email/internet 1+ times per week, which reflects the usage of the larger online population (94% of
the 18+ online population according to Nielsen, 2007).There was an equal segmentation of men
and women and the average age was 42.7.This is the fourth of an annual series of consumer
research studies and trending information was derived using the data from previous years. The
sample mirrored previous studies and is reflective of the online population as a whole. Key Findings
The majority of consumers receive some kind of marketing email with special offers from retailers,
online merchants and catalogers most common Two to one consumers prefer to be contacted by
their favorite retailer regarding new products, services or promotions via email rather than direct
mail. Sender recognition most impacts operates, while content relevance increases likeliness to
purchase Frequency preferences, or how often respondents prefer to receive emails of

111
ascertain category, are very specific to the category of email but vary greatly from
one Consumers prefer to be contacted by their favorite retailer via email.

RECOMMENDATIONS
To explore the mainland market, Hong Kong companies should position themselves in areas in
which they are strong. From the viewpoint of mainland consumers, Hong Kong's leather consumer
goods are considered competitive in the high-end and mid-range. Mainland consumers are brand
conscious, and it is vital to promote own brands which have clear image.
This survey also shows that Hong Kong products are preferred for their design/style and quality.
Bearing these in mind, Hong Kong companies should never compromise on quality, and they
should allocate more resources to product design, selection of material and craftsmanship.
To conclude, it can be said that through the global sports retail industry has reached its maturity,
but the Indian sports retail industry is still at its infancy. But with the huge potentiality existing
in the Indian market, it is expected to grow in leaps and bounds in the future.

The prices of the shoes must be reduced to increase sales.

New lines of collections should be introduces for festivals.
The stores must be decorated properly.
Seasonal promotion campaigns, like special discounts & advertisements (magazines, internet,
etc.), could be employed.
Product displays should be designed to create a strong first impression.
More number of outlets should be opened to reach to all types of customers in all the
regions. More variants should be introduced in the accessories section.

CHAPTER-8

LIMITATION AND SCOPE OF FUTURE RESEARCH

The collected data are placed into an order. Percentages of respondents answered similarly are
calculated and placed in a table. Then this is interpreted. This involved drawing conclusion from
the gathered data. Interpretation changes the new information immerging from the analysis into
information that is pertinent or relevant to the study.

Due to limited time period and constrained working hours for most of the respondents, the
answers at times were vague enough to be ignored.

112
The collected data are placed into an order. Percentages of respondents answered similarly are
calculated and placed in a table. Then this is interpreted. This involved drawing conclusion from
the gathered data. Interpretation changes the new information immerging from the analysis into
information that is pertinent or relevant to the study.

Due to limited time period and constrained working hours for most of the respondents, the
answers at times were vague enough to be ignored.

Geographical scope of the study was limited to a small area, which may not represent the
whole sector of India; Size of the sample is 50, which is, of course small in comparison to
entire population.

Due to limitation of time only few people were selected for the study. So the sample of
consumer was not enough to generalize finding of the study.

There can be many interpretations & explanations to the data collected. This is empirical
study and the research provides the explanation as understood by the researcher only.

The source of data for the study was primary data with the help of self-administered
questionnaire. Hence, the chance of biased response cannot be eliminated through all
necessary steps were taken to avoid the same.

The data taken from the secondary source like internet, newspaper, books may lack some
proper explanation or may be not properly interpreted.

The responses of customers are presented in a way convenient to the researcher and can
be interpreted in different ways.

SCOPE OF FUTURE RESEARCH

This study opens up new grounds for further research. Further studies can address the
following issues to have more insights on the subject.
Studies can be done to find out the effect of Sales Promotions on Consumer Based Brand Equity
Scale incorporating the concept of brand personality proposed by Aaker (1995) and shown in
the scale developed by Papu, Questar and Cooksey (2005). In this study, Brand Awareness and
Associations were clubbed together but they could be separated in future studies.

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 Further, studies can extend to other Product categories and classes which may lead to the
generalisation of the findings of the study. The concept of Sales Promotion and Brand Equity
in the service sector could also be examined in detail.
A similar study of this sort could be conducted during a period when
Sales Promotion is on instead of doing it in a simulated environment like in this study. This
might reveal possible differences in consumer responses between real life situation and simulated
environment.
The study among heterogeneous groups, having different demographic characteristics
pertaining to Sales Promotion and Consumer Based Brand
Equity and with respect to different products and services will be an added scope for
further research.
Similarly, further research might concentrate to find out the differences, if any, that exists
between homogenous groups at different geographical areas.
Among the different segments in the market − economic, popular or premium - which are
more prone to Sales Promotions and what effects they have on
Consumer Based Brand Equity will be another interesting area of research.
Another interesting dimension will be to find out the differential effect of
Sales Promotions between Indian and foreign brands (country-of-origin effect) as well as
national vs. private labels on Consumer Based Brand Equity.

CHAPTER-9
CONCLUSION
The specific brand objective of Nike India would be to build up its brand reputation, image and
equity. A brand is not simply a collection of products and benefits, but also a storehouse of value
stemming from awareness, loyalty, and association of quality and brand personality. A brand is a
name, term, sign, symbol or design or a combination of them intended to identify the goods or
services of one seller or group of sellers and to differentiate from those of competitors. In essence, a
brand identifies the seller or maker. It can convey up to six levels of meaning: Attributes, Benefits,
Values, Culture, Personality and User. If a company treats a brand only as a name it misses the
point. The branding challenge is to develop a deep set of positive associations for the brand.

Although these six meanings are noticeable in the Nike brand in the west and other parts of the
world, they are yet to be cultivated in India. Nike has to ensure that their brand is built up on these
114
pillars in India.

The secondary brand objective of Nike India would be to ensure that they match the market share
and sales volumes of its competitors. After all, a company is in business to make profits and stay
ahead of its competitors. A company, product or brand may have a very good reputation and
image, but if it is not profitable, it does serve its purpose. At the same time sales figures and data
can be misleading. Hence market share has also to be paid attention to.

Nike despite being one of the most popular brands in the world has not really caught on in India.
Yet, there is reason to believe that Bata’s Power and Liberty would be ahead of Nike in terms of
popularity. We also notice that Nike is at par with Reebok. This again does not reflect too well on
the brand, considering that Nike outsells Reebok everywhere else in the world.

Hence it is reasonable to state that Nike’s popularity level in India could do with a boost. The
best way to achieve this would be some serious brand building. The image of the brand has to be
improved and people must be made aware of its presence. Thus, the rationale behind choosing
improvement of brand image and reputation as the company’s primary objective is quite clear.

Nike’s distinctive competency lies in the area of marketing, particularity in the area of consumer
brand awareness and brand power. On the global scale this key distinctive competency towers over
the competitors. As a result, Nike’s market share is number-one in the athletic footwear industry in
most places around the world. Catch phrases like, "Just Do It," and symbols like the Nike "Swoosh,"
couple with sports icons to serve as instant reminders of the Nike Empire. It is about time that this
competency is leveraged on to India.

Two key attributes of a distinctive competency are its inability to be easily replicated and the value
or benefit it offers to consumers. Few companies have such a recognizable image and the resources
to promote it. This ultimately translates into added value for consumers. The public benefits from the
strength of Nike’s image at the point of purchase. For decades, consumers have come to associate the
Nike image with quality products. By associating star athletes and motivational slogans like, "Just
Do It," with marketing campaigns that emphasize fitness, competition, and sportsmanship,
consumers identify their purchases with the prospect of achieving greatness. Younger consumers
especially benefit from this positive influence. This image is something that competing companies
can not easily duplicate by simply enhancing the physical characteristics of their products.
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Nike’s vision is to remain the leader in the industry. The company will continue to produce the
quality products that have been provided in the past. Most importantly, Nike will continue to meet
the ever-changing needs of the customers, through product innovation. In the past, the company has
utilized product differentiation as the main competitive strategy. As Nike’s reputation dictates, it
will continue to place emphasis in this area. Nike has built its business on providing products that
rise above all others and this has made it the worldwide success that it is today.

Nike is known for its technologically advanced products and is the leader in this area. This allows
Nike’s products to stand out from the rest. The company’s focus also allows it to maintain a
somewhat narrow niche that enables it to effectively capture the needs and wants of the
consumers. An example of Nike’s superior and innovative technology is its new range of shoes
called “Air Presto”. Termed as the first T-shirt for the feet, these shoes can take the shape and size
of the wearer’s feet. Unlike regular shoes it comes are sizes like XL, L, M, S and XS. Each of
these sizes can accommodate three conventional foot sizes. Nike will continue to produce such
path-breaking products in the future and stay a step ahead of its competitors.

Nike will also focus on making a strong effort in price leadership. Nike’s products in the past have
been concentrated in the higher end of the pricing category. An entrance will now be made into
lower price categories with these quality products. This will enable Nike to capture an even greater
hold on market share.

Presently, the only form of customer relationship management activity that Nike has adopted in
India is product warranty. Nike shoes come with a six-month warranty. If the shoe is found to be
defective or wears out within six months due to no fault of the wearer, Nike replaces the product.
This is only the first step and more needs to be dome in this area.
Being a company that always strives towards excellence, Nike needs to know exactly what its
customers think about their products. A good way of assessing this would be to have the customer
fill in a form at the point of purchase. The form will ask the customer his / her opinion on the product
as well as the showroom. Suggestions and comments would be welcome. However, care must be
taken to ensure that these forms are not too cumbersome and do not take up too much of the
customer’s time. Surveys have indicated that normally people don’t mind filling in forms as long as
they are not too long.
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Another good method would be to introduce a system of customer points. Every time a customer
makes a purchase, he would earn himself a certain number of points, depending on the price of the
product. After he crosses a certain point level, he would be entitled to a gift from the company or
choose a product of a certain value from the range. This would be helpful in building customer
loyalty and give them an incentive to make repeat purchases. A most valued customer database
could be created from her e and various forms of direct marketing could be directed at them. This
would help the company to retain its existing customers.

A third way to improve customer relationship would be to issue gift coupons and vouchers.
People would have the facility to buy these vouchers and present them to their dear ones. This
would be a good way to reach out towards newer customers through existing ones.
Experts believe that e-commerce is a key area for economic development in the 21st century. This
is undoubtedly true in relation to Russia, where over the next few years will continue the rapid
growth of e-commerce. Currently, we are witnessing the rapid spread of the Internet, not only in the
cities but also in remote regions of Russia. In my view, a few years in e-commerce will be involved
more users, and one in five will be weekly shopping online. Those enterprises that before others
will create their representation on the Internet, will have an advantage over those who work
exclusively in the traditional form.

In conclusion, the degree project should be noted that all the goals and objectives have been met:

• Was determined the relevance of the e-shop, selling different kind of shoes.

• Were considered the pros and cons of e-commerce.

• Were studied the competitors to get the idea what are their strong and weak point, to develop
the competitive strategy of LifeShoes project.

• Was decided the design of the website.

• Was decided the ways of promotion.

According to estimates, it was determined that the project should be recouped through
11,5 months.

The aim of this project was to develop competitive marketing plan of opening the e-shop of sport
shoes and boots, so the web-page is one of the most important things it should be noted that in the
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developed of LifeShoes store interface is successfully combined with either functionality or
ease usage.

Developed the most convenient and accessible work potential client, accessible and
understandable dialogs. Categorised products with a detailed description with illustrations,
flexible ability to search by various criteria, by browsing "novelties" and the best-selling products
will leave a good impression on the client. On any product buyer can leave feedback, thereby
forming, and additional advertising product. In way to give confidence to the buyer in the safety
of their confidential dat, will be presented good quality pictures of products from all sides
around, the forum where buyers and users could leave their comments, it will be published the
documents of guarantees, certifications, etc. Various ways of payment and delivery will suit for
any customer, because it can receive your order without leaving the house on time. It is possible
to flexible work of Logistics Company and the safest kind of payment - cash in delivery that is
the most popular kind of payment in Russian Federation.

Another conclusion is that the promotion is another of the most important parts for the internet
shops, that includes in SEO work, different kind of advertisements, as banners, mailings, etc,
also as different offers, via discounts, sales, gifts - to obtain even more customers.

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 BIBLIOGRAPHY

Books:

PHILIP KOTLER, MARKETING MANAGEMENT, NEW MILLENNIUM

EDITION 2000.

V.S RAMASWAMY AND S. NAMAKUMARI MARKETING MANAGEMENT,

SECOND EDITION.

Web Sites

www.nike.com

www.webcrawler.com

www.google.com

www.indiatimes.com

Magazines

Business India

India Today

The Hindustan Times

The Economic Times

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 QUESTIONNAIRE
1. Do you like Nike footwear products? Why or Why not?

(a) Yes
(b) No

2. Did you buyed nike footwear products?

(a) Yes
(b) No

3. Why do you buy nike footwear product?

(a) High quality

(b) Brand +Trendy pursuer
(c) Other

4. What type of sports do you like?

(a) Soccer
(b) Basketball
(c) Running
(d) Other

5. If you want to buy a sports footwear, which one is your best choice?

(a) Nike
(b) Reebok
(c) Addidas
(d) Others

6. What kind of nike products do you buy?

(a) Footwear
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 (b) Clothes
(c) Accessories
(d) Other

7. Do you think prices of nike footwear is expensive?

(a) Yes
(b) No

8.Where is the best place to reach you with Nike advertisement?

(a) Television
(b) Newspaper
(c) Magazine
(d) Internet

9..How often do you buy nike products?

(a) Daily
(b) Weekly
(c) Monthly
(d) Yearly

10. How many times do you watch nike TV adverstisment in one month?

(a) 0 times
(b) 1-5 times
(c) 6-10 times
(d) 11-15 times

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