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Proposal for

Nike Dri-FIT
Market Research
Prepared for: Alison Dean
June 14, 2009

Table of
Content
Executive Summary
Background Problem
Definition Research
Design Fieldwork Data
Collection Data Analysis
Reporting
Timing
Appendices

Executive Summary
This proposal responds to your brief of June 15 2009 and
describes: Business Objective:

to change, reinvigorate or phase out the Dri-FIT range of products

Research Objective:

to assess if consumers are aware of the brand and the media communications.

to assess if consumers are familiar with the technology and consider it important.

to understand purchase interest across different price points and evaluate spend potential.

to assess consumer preferences to designs, colours and materials.

to evaluate in store distribution, visibility and

availability. Our Recommended Approach:


Store Audit:

Visit stores to assess what are the barriers to purchase (poor visibility, limited
availability and knowledge of sales staff)

Qualitative:

Conduct focus groups with user groups to explore reactions to the brand, the
designs and media communication material.

Quantitative:

Conduct questionnaires outside stores to measure awareness of the brand


and media communication material and to assess interest at current and
alternative price points.

Sample Composition: n=300 Questionnaire / n=8 Interviews with Store Managers / n=5 Focus Groups
Timing:

10 weeks from project confirmation

Background

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

Problem Definition

Problem Definition

Research is the systematic collection and analysis of information which helps to


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

Problem Definition

The objectives of this research study are:


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

Our Research Methodologies

Qualitative

In-depth understanding
of customer behaviour and attitude
Focus Groups
In-Depth Interviews

Quantitative

Quantify consumer
behaviour and attitude
Questionnaire

Our Approach
We recommend a three-phase approach:

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

Our Approach

The research variables include:


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

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

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

Price

Promotion

Place

Is the price

Are you connecting to

competitive?

the most valuable

Do you have good

Are consumers

users?

visibility in store?

shopping around for a

Are you

Are you in the right

better deal?

communicating the

store?

Can you compete?

benefits clearly?

Research Design

Research Design
Who, What, Where, When and Why?
Our research design is the framework of our market research proposal. It defines the information needed to
conduct the research and how we propose to obtain it (Malhotra, 2007: 78).

Store Audit
Barriers to Purchase

Assess barriers to purchase


Assess the styles available Assess
the knowledge of sales staff Assess
media communications

Qualitative Research
Consumer Understanding

Understand core target consumer


groups interest in the brand, and
more importantly their perception /
attitude towards it.
Understand the pre-defined core
target consumers life-style and
attitude to fitness.
Understand the triggers that lead to
purchase

Quantitative Research
Brand Test

Measure awareness of the brand and


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

Store Audit
Barriers to Purchase

Qualitative Research
Consumer Understanding

Quantitative Research
Brand Test

Valuable Users

Valuable Users

Valuable Users

What they know about the brand?

What sport do they do?

Level of brand awareness?

Do they understand the benefits?

What do they wear?

Level of Interest in the brand?

Are they able to communicate

What is important?

Perception of the brand?

benefits to customers?

Which brands do they use?

Likelihood to buy at current and

How visible is the brand in store?

Why do they use them?

different price points?

How do they rate Dry-FIT

Which have the best designs?

Attractive Attributes of the brand?

What is the competition?

Which are the most wearable?

Level of agreement with media

What are the best sellers?

What do they like about the

communication?

Why are they the best sellers?

advertisements?

Is current marketing successful?

Research Design: Store Audit


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

Length of interviews:

Store Manager & Staff

30 minutes
Selection
Stores will be selected in high traffic areas

Hong Kong / Shanghai /Sydney


8 x Stores

Interviews will be conducted with store managers

Nike or Outlet Store

Stores must keep Dri-FIT range

Sample attached as an appendix

Research Design: Focus Group


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

Length of interviews

Aged 18 50

Approximately 120 minutes

Athlete / Athletic Participant / Consumer

Recruitment

8 x Respondents per group

All respondents are screened to ensure suitability

Hong Kong / Shanghai /Sydney


Mixed Group
1 x Male / 1 x Female
1 x Male / 1 x Female
Current user of brand
or competitor

1 x Athlete
2 x Athletic Participant
2 x Consumer
Minimum 4 respondents in each group

Sample attached as an appendix

Research Design: Questionnaire


Rationale:
The key objective of this questionnaire is to understand consumer awareness, behavior and
perception towards the brand and their acceptance at different price points. This questionnaire shall
be conducted outside stores in high traffic areas. The method will provide a representative sample of
the population
(Malhotra, 2007:296-322 & Williamson et al., 2000: 235249).
Length of interviews
The criteria for respondents:

Approximately 15 minutes

Aged 18 50

Recruitment

Athlete / Athletic Participant / Consumer

As customers exits store


Questionnaire screens respondents to ensure suitability

Hong Kong / Shanghai /Sydney


Total sample size
Male & Female

N=300
Sample composition

Age 18 29
Age 30 - 39
Age 40 - 50

N=100 in each age group (M x 50 / F x 50)

Sample attached as an appendix

Data Collection

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

Data Collection
Design of questionnaires and subsequent analysis will be
conducted by a senior research director (Malhotra, 2007:305-306).
All interviews will be conducted in the language of the participants.

Data Analysis

Lifecycle of the Research Project

Meet with Nike Brand Manager to


ensure understanding of objectives,
target consumers and research plan

Fieldwork Questionnaires
administered

Analyse results check data and


figures from questionnaires, watch
videos/ transcripts of consumer
groups and interviews

Store Audit & Develop questionnaire


answer options, decide on which
consumers will take part in discussion
groups and interviews

Hold focus groups and finalise


questionnaire answer options

Prepare presentation that answers


clients objectives and make business
recommendations

Analysis will allow us to


measure perception and
attitudes

Potential: Purchase intention


would be improved if perception
and attitude towards the range
improves.

Dri-FIT is a good brand

27.0

I have seen the advertisements

28.0

Dri-FIT designs are good

25.0

Dri-FIT pricing is competitive

27.0

Dri-FIT have the styles I want

100.0
67.0
43.0
38.0
8.0

29.0

Dri-FIT is a fashionable brand

17.0

27.0

Dri-FIT is suitable for me

18.0

26.0

Maintenance: Concept creates low to


moderate perceptions of Dri-FIT as a
fashionable brand.

Maintenance

Potential

Analysis will allow us to measure purchase interest


Research will identify the segments with greatest purchase intention

50%
60%

65%

Females aged 18-29 has


purchase intention of 65%

Aged 18-29
N=50
Female
N=150
Total Evaluated
(n=300)

Data Analysis
The tool we will use to analyze the relationship between the independent and
dependent variables is cross-tabulation (Malhotra, 2007: 468).
Our rationale for using this method:

Cross tabulations are easy to interpret and understand.


They can be used with any level of data: nominal, ordinal, interval, or ratio.
A table can provide greater insight than single statistics.
It solves the problem of empty or sparse cells.

Reporting

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

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

Timing

Timing
A total of 10 weeks are required to deliver the final research output.
Week No.
TASK
Store Audit
Qualitative
- Preparation of research
- Recruitment
- Conduct Focus Group
- Reporting
Quantitative
- Set up, develop questionnaire
- Fieldwork
- Reporting

10

References

References

Alreck, P.L. and Settle, R.B. (1999) Strategies for building consumer brand preference, The Journal of Product & Brand
Management, Vol 8, No 2, pp 130-144, viewed 13 June 2009 http://www.emeraldinsight.com
Francis, G. (2007) Introduction to SPSS for Windows, v15.0 and 14.0, Pearson Education Australia
Kay, M. J. (2006) Strong brands and corporate brands, European Journal of Marketing, Vol 40, No 7/8, pp 742-760, viewed 13 June
2009 http://www.emeraldinsight.com
Kotler, P. (2004) Ten Deadly Marketing Sins: Signs and Solutions, John Wiley & Sons, New Jersey, pp 20, ISBN: 978-0-471-66206-8
Malhorta, N. K. (2007) Marketing Research: An Applied Orientation 5th Edition, New Jersey, Pearson Prentice Hall.
Morgan, D. (1993) Successful focus groups : advancing the state of the art Chapter 1, pp. 3-19, Sage Publications, Newbury Park,
Calif. Ramaswamy, V. (2008) Co-creating value through customers' experiences: the Nike case, Strategy & Leadership, Vol 36, No 5,
pp 9-14,
viewed 13 June 2009 http://www.emeraldinsight.com
Rossenberger, P. J. (1996) Focus Groups: An Introduction for the Uninitiated, pp. 1-15, Department of Management, University of
Newcastle
Shiffman, L., Bednall, D., Ocass, A., Paladino, A. and Kanuk, L. (2005) Consumer Behaviour, 3rd Edn, NSW, Person Education
Australia
Williamson, K. (1989) Research methods for students, academics and professionals: information management and systems, Kirsty
2nd ed., Chapter 14,2002,pp. 235-249

Appendices