QI: What is the management decision problem facing Nike as it attempts to retain its leadership position?
Contemporary business environment is becoming more complex, and Nike has to face with the challenges of rivalry with such strong brands as Reebok and Adidas, who take the second and the third position in the industry. The pillar of the Nike´s success on the international market is the brand image and its reputation, which determine customers´ loyalty and sustainable market share. Upper middle and upper class prices, which Nike offers to their customers, however, place pressure on the organizational ability to maintain its market positions, especially, with the rivals, entering price competition. There is a serious risk that Nike will no longer be able to sustain its competitive advantage and remain a leader on the market with the current competitive strategy, as the customers become more price-sensitive. With that in mind, the management of the organization faces with the dilemma of whether current price level for the Nike product is adequate in a given competitive environment. Additionally, company is very dependent on the US market, where 51% of the total revenue comes from the US sales and the international market only accounts for one third of the total sales, leaving Europe the second in the revenue channels for the company. Reebok and Adidas position in the same geographical segments are becoming stronger, creating strong pressure on Nike´s ability to maintain its market share and can have a dramatic effect on Nike.
QII: Define the marketing research problem facing Nike, given the management decision problem you have identified.
As it was identified, the company faces a major challenge to maintain its market share and market competitiveness, given strong competition from Reebok and Adidas. One of the major difficulties with regards to market research is related to the understanding of the customers´ “desires” and expectations with regards to their sports products. The company places international arena in the heart of its marketing strategy, and the ability to bring in the message about product innovation in very culturally diverse environment is a challenge, which must be addressed with a robust market research mechanism.
QIII: Develop two suitable research questions and formulate two hypotheses for each.
There are various elements, which must be considered by the company, when it comes to the market research. It is evident that the issues of Nike are related to the price acceptance and the changing preferences of the consumers with regards to the brand identity. The company needs to understand whether the consumers are still ready to pay USD$ 100+ price for their product and whether their product innovation-focused marketing strategy receives expected return from the clients. With that in mind the following research questions can be developed:
Does current price level adequately addresses the objectives of Nike´s generic strategy?
Hypothesis: current prices are acceptable by the customers and along with the product-focused marketing strategy can help Nike maintain its profitability and the market shares.
Is there a positive relationship between the product innovation-focused advertisement campaigns and the improvement of the Nike identity and positive reputation among customers?
Hypothesis: Product innovation-focused advertisement has a positive impact on Nike´s reputation and brand image.
QIV: How can the Internet be used to help Nike in conducting marketing research?
Contemporary business environment highly relies on the information flow and visibility, created by the social networks and general high level of the internet use among individuals. It is evident that the US and Europe population is becoming increasingly “digital”, and the use of mobile phones increased dramatically over the past decades. This wide interest in internet use and access to mobile technology can be used by Nike for market research in various ways. First of all, the company can conduct market research among its Facebook and other social media fan pages. Secondly, it can be used for sending an online-based survey to the target mailing list of the corporation. Finally, the internet is the biggest source of information, which can be used by the company to access specific statistical and qualitative data to support their primary research.