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.
SAMPLE DESIGN
THE BASIS OF SAMPLING: -
Consumers of Nike shoes are chosen randomly, so that unbiased, representative sample may be obtained.
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.
COMPANY PROFILE
NIKE INDUSTRIES LTD. – A COMPANY PROFILE
Nike India Ltd (BIL) is India‘s largest footwear company. Nike first established itself in India in 1931 and commenced manufacturing shoes in Batanagar in 1936. The company has its Headquarters in Kolkata and manufactures over 33 million pairs per year in five plants located in Batanagar (West Bengal), Faridabad (Haryana), Bangalore (Karnataka), Patna (Bihar), Hosur (Tamil Nadu). It secures its leather supply from two tanneries in Mokamehghat (Bihar) and Batanagar (West Bengal). It has a distribution network of over 1,500 retail stores and 27 wholesale depots provide excellent access to consumers and wholesale customers throughout India.
As on December 31, 2006, the Canadian parent had a 51 per cent stake while institutional holding was about 13 per cent.
RECENT DEVELOPMENTS
Nike India has said that it’s Faridabad and Mokamehghat units are being taken over by Fashion Shoe Private Ltd and BDCL Enterprises Pvt Ltd, respectively. The company is also enabling the buy back provision in its Articles of association to enable buy back of shares.
The assets and liabilities of both the units will be transferred to these companies and shares will be offered in the agreed ratio to the existing shareholders of Nike India Ltd on a record date, which will be fixed by the Calcutta High Court.
While retail sales have increased both in value and volume, wholesale sales have declined due to restriction of supplies as a means to recover customers‘outstanding. General recession and sluggish market conditions in the industry also have had a direct impact on lower sales and profitability. Resistance of consumers to price rises in popular volume products as well as discounts to clear slow-moving stocks and under utilization of production capacity adversely affected the operational results. The lockout declared at the Peenya factory on October 1, 2007 due to serious industrial relation problems and non-compliance with the tripartite settlement has been withdrawn. The footwear manufactured in this factory, which was shifted to the company‘s other factories and associated manufacturers, will now be gradually produced within the factory. The commencement of production from this factory will help in re-cooping the minimal loss being suffered by the company from this lockout.
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.
But Simonson has this to say: “The fact that consumer preferences are often fuzzy, unstable, and manipulatable is unlikely to change. So, the effectiveness of methods to give customers exactly what they (say they) want has been grossly exaggerated.” His take on the long-held assumption that individual marketing will supplant targeted marketing is “not so fast.” In studies, he has learned that “even when customers have well-defined preferences and receive offers that fit those preferences, it is far from certain that the response to such offers will consistently be more favorable than those directed at larger market segments.”
It’s all psychology. Consumers with well-defined preferences may be skeptical that a marketer could match expectations. Those who don’t know what they want may not ever see the fit with what the seller wants them to buy. So, individualized offers depend on customers’ preferences &; how the offer was extended &; and on trust. “Effective individual marketing requires not only an understanding of individual preferences and matching offers to those preferences, but also a thorough familiarity with the various factors that impact customers’ responses,” Simonson writes. This is a tall order, one that some companies have been able to fill, at least to some extent. For example, Amazon keeps track of customers’ purchases and suggests other books they might like. Dell builds computers from mass-made parts to customers’ specifications. But Simonson argues some companies can take the concept too far, like the Custom Foot chain of shoe stores that took detailed measurements and specifications from each customer to design one-of-a-kind shoes. Custom Foot didn’t take into account that some customers were put off by the individualized attention, Simonson says, and felt obligated to buy the shoes because the store went to so much trouble. They often didn’t come back. So knowing only the customer preferences is not enough. It is required to understand other aspects of customer behavior. Kipping this in mind, present study will find out and analyze consumer behavior of Nike shoes with reference to ladies segment.
FUTURE PLAN
The management says that it is not averse to outsourcing if it worked out cheaper. It is also open to the idea of importing shoes - mostly from China - if it works out cheaper.
Nike and Reebok India Company have announced an agreement to foray into retailing partnership for sale of Reebok and Rockport footwear in Nike outlets. The partnership entails retailing a range of sports shoes for walking, running, tennis and training for personal fitness and sports ranging between Rs 900-2,500.
An attractive valuation compared to its peers is the main trigger for the scrip. Besides, the company’s aggressive focus on retailing and revamping of business (a division into shoes and apparels) is also helping sentiment for the scrip. Plans are afoot to start selling apparel in India made by the joint venture North Star. There’s talk that the company is planning on a voluntary retirement scheme (VRS) to cut costs.
For the third quarter ended 30 September 2007, Nike India reduced its losses to Rs 5.68 crore (Rs 8.51 crore) on a 9.2% increase in net profit to Rs 154.27 crore (Rs 141.26 crore). Despite reducing its losses for the quarter, Nike India has, over the last few quarters, been continuously recording weak performances as a result of an overall slowdown in the industry due to lower consumer spending. Increasing domestic competition, particularly from the unorganized sector, has also been eroding into the company’s market share.
The company is finding it difficult to maintain its market share in a highly price-sensitive Indian market, despite having strong brand recall.
97% of the company’s revenues are from the domestic market while the remainder is from exports. Nike India is the biggest player in the Indian shoe market.
Nike India’s major problems include its high cost of production and low emphasis on marketing. The company may be able to address the first problem through outsourcing products. Bata’s brand image has been restricted to that of a company that emphasizes on utilitarian products more than trendy ones. Customers feel the company is lacking in innovation. Hence, their preference has shifted to other local brands.
Nike India has a large marketing network with over 1,500 showrooms, 27 wholesale depots and eight retail distribution centers across the country.
Besides, there is a network of 300 exclusive wholesalers servicing 25,000 dealers all over the country. However, in spite of this and the license to sell other brands like Nike, Hush Puppies and Lotto, Nike has not been able to improve sales consistently. The recent rise in sales during the third quarter ended September 2006 can be attributed to the festive season. Recently, it also entered into a retailing tie-up for Lee Cooper shoes.
Nike India has also been trying to focus on aggressive marketing of its product. The company has been going through a period of transition for the past one year. With the expansion of the retail industry in New Delhi and Mumbai, the company has recently decided to shift its marketing operations to Delhi in order to provide value shopping for its customers. However, the manufacturing activity and the registered office will continue at Kolkata.
Nike India has plans to invest in sophisticated machinery to retain its niche place in manufacturing. The company has put a fresh focus to its retail business. The company has decided to cleanse its wholesale operation by building relationships with credit-worthy buyers.
It is to the company’s credit that it has lately overhauled its marketing set-up into a four-tier retail structure that will be stocked with products matching the area’s customer profile. A Nike outlet in an up market place will offer a distinctly different range of footwear from another in the suburbs.
At the top of the four-tier structure will be international stores stocking brands like Nike and Reebok. Next will be city stores, located in up market areas and catering to middle and high-income groups. The company has identified the brands Power, North Star, Bubble gummers, Marie Claire and Hush Puppies for the top end of the market. Third in line will be family stores at commercial locations displaying basic and mid-range footwear. At the bottom will be bazaar stores that will basically aim at driving volume sales at lower price points.
The management of Nike India is taking major steps in terms of improving market penetration, focus on stores configuration, distribution logistics, better industrial relations and overhead rationalization. Launching of new products always remained at the center stage of the company’s operations.
At the same time, with the opening up of the economy, more and more goods will be imported from China. This may significantly affect Nike India’s prospects unless it manages to wean away customers with a drastic cut in costs. Alternatively, like other Indian manufacturers, even Nike may consider relocating its manufacturing bases in China. However, it is not that easy a task to undertake.
Nike India, the 51% subsidiary of Toronto-based Nike Shoe Organization, remains the biggest player in the Indian shoe market, though its share in footfalls has been decreasing over the years.
Now in a determined bid to straddle across all product and price points, Nike India has decided to restructure its 1,300-outlet strong retail business division along specific customer segments into Bazaar, Family, and City and Flagship stores.
Nike India has decided to appoint brand managers for each product group in a newfound aggression to tackle dwindling sales. Each of these managers assisted by a dedicated team would be like a brand champion responsible for procurement, production, advertisement, promotion and re-supply.
Nike India has roped in Ogilvy & Mother for devising its festive season advertising, side-stepping JWT, its incumbent agency. The job involves developing special communication directed towards the festival season shoppers.
Nike India Ltd (BIL) is India’s largest footwear company selling over 60 Mn pairs per year in India, USA, UK, Europe, Middle East and Far East. BIL has a market share of 60% in leather products and 70% in canvas shoes.
The footwear industry in India is highly fragmented and dominated by the unorganized sector. The industry size is around Rs 75 Bn and is growing at around 10% annually. It competes with Indian players such as Liberty Shoes, Phoenix International, Mirza Tanners, Tatas, Action Shoes and Lakhani Shoes and global players like Adidas, Reebok and Nike. Accessories and garments contribute footwear sales account for more than 96% of sales while the balance. The turnover break up is as follows –
↓ Products Volume (%) Value (%)
↓ Rubber and Canvas 50: 30
↓ Leather 29 :57
↓ Plastic 21: 9
GROWTH DRIVERS
The company has a very comprehensive distribution network which comprises its own and franchise stores. It has 1500 showrooms, 25 wholesale depots and 8 distribution centers.
POPULAR BRANDS
Nike owns brands like Hush Puppies, Signor, Marie Claire Power, Sandak, Hawai, Naughty boy and Ambassador. It also distributes other brands such as Nike and Lotto.
Focus on middle-class and upper class Nike will continue to focus on middle and upper class customers. It is introducing ‘budget stores’ which will help customers to identify with the brand. It is also increasing focus on rural thrust for volume growth in the low-priced footwear segment.
RISK AND CONCERN
Lifting of quantitative restriction on import of footwear will lead to the market being flooded by imports. Labor issues have always bothered BIL and this resulted in disruption of manufacturing activities on numerous occasions. Competition is hotting up in the domestic market due to popular brands such as Gaitonde, Red Tape, Lotus Bawa and Tatas. These brands are gaining market share especially in the premium segment and in this segment BIL has no significant presence.
Latest Results Sales for Q3 FY2000 increased by 5.5% yoy to Rs1.7bn. profits dropped by 90% yoy to Rs3.8 Mn due to lower operating margins and higher depreciation and interest. Depreciation increased by 6.3% yoy to Rs 37 Mn while interest cost increased by 9.3% yoy to Rs 23.4 Mn.
Operating margins dropped by 3.3% due to increase in input cost. The Peenya plant has not commenced operations despite lifting up of the lock out since July 3, 2007.
VALUATION
BIL’s long-term success is dependent on the how labour issue is tackled and the flexibility, which it can adopt to meet threat of imports and competition from local footwear companies. Long term investors with a two-year investment horizon can accumulate the stock at current levels. It is also increasing focus on rural thrust for volume growth in the low-priced footwear segment.
Lifting of quantitative restriction on import of footwear will lead to the market being flooded by imports.
Labor issues have always bothered BIL and this resulted in disruption of manufacturing activities on numerous occasions.
Competition is hotting up in the domestic market due to popular brands such as Gaitonde, Red Tape, Lotus Bawa and Tatas. These brands are gaining market share especially in the premium segment and in this segment BIL has no significant presence.
Sales for Q1 CY2001 decreased marginally by 0.6% yoy to Rs 1590.7 mn. There was a net loss of Rs 30.2 mn as against a profit of Rs 39.6 mn in the corresponding period of the previous year. The loss is due to lower operating margins and higher interest.
BIL’s long-term success is dependent on the labor issue and the flexibility, which it can adopt to meet threat of imports and competition from local footwear companies. Long term investors with a two-year investment horizon can accumulate the stock at current levels.
FINANCIAL HIGHLIGHTS
(In Rs Million) 200012 (12) 199912 (12) 199812 (12) Q1200103
Q1200003
Sales 7,315.70 7,103.90 6,353.20 1590.7 1600.9
% Growth 2.98 11.82 (0.6)
Net Profit 304.60 242.60 166.30 (30.2) 39.6
% Growth 25.56 45.88 (176)
EPS(Rs) 5.90 4.70 3.20 3.08
% Growth 25.53 46.88
Ratios 200012 (12) 199912 (12) 199812 (12) Q300009 Q399909
OPM(%) 9.77 9.08 7.16 1.09 6.9
NPM(%) 4.16 3.42 2.62 2.5
ROE(%) 8.95 7.44 5.31
Nike understated 9 month losses -
Brief Financials (in Rs. Mn.)Detailed Quarterly
Period ending (months)30-Sep-2007 (9)31-Dec-2006
(12)31-Dec-2006 (12)
Net sales 4980.206461.177172.91
Other Income42.1063.6165.21
Total Income5022.306524.777238.12
Cost of goods sold4974.706471.797051.76
OPBDIT47.6052.98186.36
PAT-117.20-74.1039.80
Gross Block-2191.072062.26
Equity capital-514.22514.22
EPS (Rs.)--1.440.77
DPS (Rs.)-0.000.75
BV (Rs.)-37.2738.71
P/E range (x)-0.0 - 0.00.0 - 0.0
Debt / Equity (x)-0.320.26
Operating margin (% of OI) 0.90.82.6
Net margin (% of OI)-2.3-1.10.5
As on 30 June 2007, the public, institutions and foreign bodies held
31.23%, 13.91% and 0.16% stake in the company, respectively
LITERATURE REVIEW
The study of consumer behavior has evolved since the Information Processing Model (Bettman, 1979) assumed that the individual is logical in his/her buying process. This model was criticized because it failed to treat different consumption phenomena motivated by symbolic meanings (Holbrook and Hirschman, 1982). Individuals are not always looking for efficiency and economy, but also for distraction, aesthetic, expression, etc. (Boyd and Levy, 1963). Calling for a broadening of theoretical frameworks of consumer behavior, many authors pleaded in favor of the study of all consumption forms (Holbrook, 1986), being inspired by European semi logy and American semiotic (Levy, 1959, 1963, 1981; Hirschman, 1980; Kehret-Ward, Johnson and Louie, 1985; Mick, 1986; Holbrook, 1986; O’Shaughnessy and Holbrook, 1988; Nöth, 1988; Stern, 1988; Grafton-Small and Linstead, 1989). These are the study of signs, meanings and production of symbols. Fantasy, emotion and pleasant aspects of consumption were then tackled from an experiential point of view. The Experiential View is a phenomenological perspective that perceives consumption as a primary state of consciousness having a variety of symbolic meanings, responses and hedonist criteria (Holbrook and Hirschman, 1982; Olshavsky and Granbois, 1979). The basis of the traditional Information Processing Model is the optimization of the utility of a product under the basis of a utilitarian evaluation of its tangible characteristics. Nevertheless, it neglects emotional aspects. On the other hand, the Experiential View leaves out different factors such as economic conditions, expectations, some elements of the marketing mix (price, distribution), perceived risk and conflicts, but mostly the social influence of the consumers’ reference groups (Holbrook and Hirschman, 1982; Business Central Europe, 1994) which is the aim of the Symbolic Interactionism Perspective. Acquisition, possession and consumption are activities taking place in a process of impressions creation or identity management which is, according to Belk (1978), an interactive process concerning both the image of goods consumed and that of the individuals consuming them. The Symbolic Interactionism Perspective deals with the relationship between consumers and the products they consume, and suggests that a significant proportion of consumption behaviors consist of social behaviors, and vice versa (Solomon, 1983). This leads us to consider the importance of socialization processes (family, reference groups) through which individuals learn the meanings of symbols and those of consumption. With the aforementioned meanings being negotiated and built through interactions with others, consumption is not only an individual activity, but also a social process of goods definition (Gallant and Kleinman, 1983). Since individuals are often motivated to acquire products according to what they mean to them and to members of their social reference groups (Leigh and Gabel, 1992), their behavior is subject to the pressures of cultural norms and the expectations of socialization institutions rules such as those coming from family and other reference groups (Faber, O’Guinn and McCarthy, 1987; Engel, Blackwell and Miniard, 1993). Thus, Symbolic Interactionism Perspective considers the human spirit as fundamentally social, and dependent on shared symbols. The symbols being generated at a global level (Geertz, 1973; Solomon, 1983; McCracken, 1986, 1988; Leigh and Gabel, 1992), the Symbolic Interactionism Perspective accepts as precept the fact that society and its culture precede every individual action, and that a cultural consensus results from interactions, communication, and negotiation between social actors (Charon, 1989).
If, at a conceptual level, the consumption good becomes an instrument of communication, at an operational level, image variables may be regarded as the intangible attributes of the product that carry cultural and social meanings. According to Erickson, Johansson and Chao (1984), an image variable is defined as “some aspect of the product that is distinct from its physical characteristics but that is nevertheless identified with the product”. The image variables emerge from four cognitive representations individuals have of their environment: the symbolism of advertising, the celebrity endorsement, the brand, and the country of origin of the product.
The made-in is considered by Dichter (1962) as the fifth element of the marketing mix, and is defined as the country where are located the corporate headquarters of the organization doing the marketing of the product or the brand (Johansson, Douglas and Nonaka, 1985). The country of origin carries a rhetoric that influences consumers’ preconceptions towards the products of a country. Its meaning can be conceived as an indication serving as a basis of evaluation (Bilkey and Nes, 1982), when one considers a product as a bundle of information. Consequently, according to Kaynak and Cavusgil (1983), the images of a foreign country that are formed by consumers are made of cognitive, affective and behavioral components. The first one represents the perceived characteristics of the country. The second one concerns the appreciation or not of those characteristics, and the third one corresponds to the actions about the country that the consumer feels are appropriate. A tendency to evaluate positively the local production compared to imported production, and biases in favor of industrialized countries have been found in previous studies (Bilkey and Nes, 1982; Cordell, 1992). This does not mean the consumer will not buy the product, but rather that he is not inclined to do so (Schooler, 1971). “When entering foreign markets, sellers often face quotas, tariffs, and non-tariff barriers. In addition, they may face an intangible barrier in the form of consumer bias on the basis of product origin” (Schooler, 1971).
The informational value of the country of origin was also found to vary according to the level of involvement of the consumer in purchasing the product and the presence of other cues such as brand name, guarantee and price (Ahmed and d’Astous, 1993). In a recently published meta-analysis of country-of-origin effects, Peterson and Jolibert (1995) conclude that the average effect size is lower (0.19) for purchase intention, higher (0.30) for quality/reliability perceptions and context dependent. More specifically, they found that the characteristics of the study (research design, type of respondents, study cues, sample size, stimulus context etc.) influence the relative effect of country-of-origin to a lesser degree for quality/reliability perceptions than for purchase intention. However, the type of respondents (students, consumers or businesspeople) had no influence on quality/reliability perceptions.
Stanford GSB marketing professor Itamar Simonson and Ran Kivetz, an assistant professor at Columbia University, asked a group of 195 Columbia students to do; eat a lot of sushi.Participants were offered a "frequent diner" program that would reward them for their patronage at various university dining locations and given a card that would track their purchases. They were randomly assigned to one of two groups those in the "low" requirement group were told they would have to purchase 12 sandwiches to get two free movie tickets, whereas those in the "high" requirement group were told they would have to purchase 12 sandwiches and 12 orders of sushi to get two free movie tickets. So, the second group had to do much more to receive the same reward. Kivetz and Simonson also asked participants how much they liked sushi relative to the typical student. The result? Students who liked sushi were much more likely to join the "frequent diner" program that required them to purchase both 12 sandwiches and 12 orders of sushi. "It shows a common mistake that consumers make & if they see an offer that seems to fit them better than other consumers, for example, a program that requires sushi-lovers to eat sushi that fit completely colors their assessment of how attractive the offer is," Simonson says. "As a result, by creating what appears like personal fit, marketers can attract consumers to frequency programs and many other promotional offers." Kivetz and Simonson replicated these findings regarding influences on participation in frequency, or loyalty, programs in studies with travelers interviewed at domestic airports.The sushi study is among a number of studies Simonson has been conducting since the late 1980s about 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.
The theme that pervades Simonson's work is that customers may not know what they want and second-guessing them can be expensive. In his words, “The benefits and costs of fitting individual customer preference are more complex and less deterministic than has been assumed." That's because, Simonson says, "customer preferences are often ill-defined and susceptible to various influences, and in many cases, customers have poor insight into their preferences."
In another recent paper, 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. In an example taken to the extreme in the 2007 movie Minority Report, Tom Cruise's character Anderson runs through a shopping mall past talking billboards that recognize him by name and urge him to buy products he has expressed interest in such as jeans and Ray-Bans; the ultimate in personalized advertising. But Simonson has this to say: "The fact that consumer preferences are often fuzzy, unstable, and manipulatable is unlikely to change. So, the effectiveness of methods to give customers exactly what they (say they) want has been grossly exaggerated." His take on the long-held assumption that individual marketing will supplant targeted marketing is "not so fast." That's because consumers are very difficult to figure out, science fiction and technology notwithstanding. "Furthermore, even when customers have well-defined preferences and receive offers that fit those preferences, it is far from certain that the response to such offers will consistently be more favorable than those directed at larger market segments."
It's all psychology. Consumers with well-defined preferences may be skeptical that a marketer could match expectations. Those who don't know what they want may not ever see the fit with what the seller wants them to buy. So, individualized offers depend on customers' preferences; how the offer was extended & and on trust. "Effective individual marketing requires not only an understanding of individual preferences and matching offers to those preferences, but also a thorough familiarity with the various factors that impact customers' responses," he writes.
This is a tall order, one that some companies have been able to fill at least to some extent. For example, Amazon keeps track of customers’ purchases and suggests other books they might like. Dell builds computers from mass-made parts to customers' specifications. But Simonson argues some companies can take the concept too far, like the Custom Foot chain of shoe stores that took detailed measurements and specifications from each customer to design one-of-a-kind shoes. Simonson argues that Custom Foot didn't take into account that some customers were put off by the individualized attention and felt obligated to buy the shoes because the store went to so much trouble. They often didn't come back. Indeed, an Internet search produces no Website.
Simonson, who has received many prestigious awards for his research on consumer behavior and marketing, teaches MBA and Ph.D. marketing and consumer decision-making courses. The loyalty program article is slated for publication in the Journal of Marketing Research this year.
Online customization gives consumers the opportunity to choose characteristics they want in a product when they shop for it online. Many companies are looking at online customization as the future of online business Janis Crow, Kansas State University marketing instructor, researched how people make choices on the Internet. She recently studied consumers in an online environment and their ability to customize several products - pizza, shoes, and electronic devices.
Crow said that her study posed two questions for respondents: first, how difficult is it to customize a product, and secondly, how likely is the person to purchase the product he or she has customized?
All participants in the study chose to customize products. In terms of customers’ likelihood to purchase, a greater number of customers made purchase decisions when there are more options to choose, she said. However, it was slightly more difficult when more features were offered.
She created a website where people could customize products to their individual preferences and needs. Crow selected three generic products: pizza, shoes, and a Personal Digital Assistant (PDA). Thirty-one college students took part in the study.
"Students could customize the three products, and I provided a drop-down box on the site with attributes to choose from," she explained. Consumers could click on a drop-down box to customize a product they would want to purchase, she said. She found that more people relied on the default choices rather than selecting other choices that were offered. She said, some research suggests that many people do not want to put a lot of effort into purchase decisions. "A lot of times, people may not have preferences already in mind," she said. When consumers have the chance to create preferences, the question is whether they rely on previous preferences or if they develop new ones, she said. In the future, Crow says she will be studying strategies that consumers go through during purchase decisions. "I will be studying decision processes to develop computer aids that could help the consumer reach their purchase decision," she said.
Although her current project involves analyzing the consumer behavior of college students in an online environment, in future projects she plans to analyze other demographic groups.” Customization will be a key business opportunity in the future for businesses online or in more typical shopping environments," Crow said.
She hopes her research will help consumers in making purchase decisions and help businesses determine products to offer and how to offer them.
Hong Kong companies, including leather consumer goods suppliers, have shown a growing interest in tapping the mainland consumer market after China's accession to the World Trade Organization and gradual opening of its domestic market. For Hong Kong companies targeting this vast market, a good understanding of the behavior of mainland consumers is necessary in order to formulate an effective and suitable market strategy.
In view of this, the HKTDC conducted a survey study in four major mainland cities in February 2007. The study was composed of two interlocking surveys. The first survey (survey on shoppers) successfully interviewed a total of 1,000 shoppers of leather consumer goods in four major cities, namely Beijing (BJ), Chengdu (CD), Guangzhou (GZ) and Shanghai (SH). The second survey (survey on retailers) interviewed managers/officers-in-charge of major department stores in these four cities.
The survey study analyses leather consumer goods in terms of consumer behavior, the competitiveness of Hong Kong brands and the consumer segments with the greatest biggest spending power. The main survey findings are as follows:
CONSUMER BEHAVIOR
Shopping locations, Department stores were the most preferred type of retailers, followed by outlets in shopping malls and chain stores. Product variety, guaranteed quality, brand choice, price, services and store environment were cited as the major reasons for visiting a leather consumer goods store.
SHOPPING TIME
Thirty-eight percent of respondents visited leather consumer goods shops at least once a month.
Shopping during weekends is common. Other popular shopping occasions include National Day (1st October), Chinese New Year (January/February), New Year's Day (January) and Labour Day (1st May).
MARKETING CHANNELS
Promotional activities in shopping malls and department stores are the most popular promotional and sales activities, followed by discount/price reduction, TV commercials, discount coupons, promotional stands, exhibitions, buy-one- (or more) gets-one-free.
PURCHASING POWER
On average, respondents owned 4.2 pairs of shoes, 1.2 pieces of wallets, 1.3 pieces of belts and 1.3 pieces of handbags/briefcases. Over the past 12 months, an average respondent's spending on leather consumer goods was as follows:
- Shoes: RMB 597 (total) RMB 328 (per pair)
- Wallet: RMB 226 (total) and RMB 193 (per piece)
- Belt: RMB 220 (total) and RMB 194 (per piece)
- Handbag/briefcase: RMB 476 (total) and RMB 359 (per piece)
SELECTION CRITERIA
When choosing leather consumer goods, product quality stood out as the principal consideration for respondents, followed by product material, craftsmanship, style/design, price and brand.
POPULAR BRANDS
Most respondents considered brands important.
4PS OF NIKE
Nike’s 4Ps comprised of the following approaches to pricing, distribution, advertising and promotion, and customer service:
Pricing: Nike’s pricing is designed to be competitive to the other fashion shoe retailers. The pricing is based on the basis of premium segment as target customers. Nike as a brand commands high premium.
Place: Nike shoes are distributed to Multi Brand store front and the exclusive Nike stores across countries. While this necessitates a second trip for the customer to come and pick up the shoes, it allows Nike to offer a much wider selection than any of the competition.
Promotion: Location, targeted advertising in the newspaper and strategic alliances serves as the foundation of Nike advertising and promotion effort. The athletes and other famous sports personalities are always taken as brand ambassadors. They form the prime building blocks of their portion strategy.
Product: The product range of Nike comprise of shoes, sports wear, watches etc. Its product history began with long distance running shoes in 1963. (Past 17 years: Air Jordan basketball shoes). Wide range of shoes, apparel and equipment. For example:
↓ Nike Oregon Digital Super Watch
↓ Nike Presto Cee Digital Medium Watch
↓ Nike Presto Cee Digital Small Watch
↓ Nike Ron Analog Watch
↓ Nike Triax 10 Regular Watch
↓ Nike Triax Armored II Analog Super Watch
↓ Nike Women's Imara Fit Digital Watch
SWOT ANALYSIS
SWOT ANALYSIS NIKE, INC.
STRENGTHS
↓ Nike is a very competitive organization. Phil Knight (Founder and CEO) is often quoted as saying that 'Business is war without bullets.' Nike has a healthy dislike of is competitors. At the Atlanta Olympics, Reebok went to the expense of sponsoring the games. Nike did not. However Nike sponsored the top athletes and gained valuable coverage.
↓ Nike has no factories. It does not tie up cash in buildings and manufacturing workers. This makes a very lean organization. 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. If prices rise, and products can be made more cheaply elsewhere (to the same or better specification), Nike will move production.
↓ Nike is a global brand. It is the number one sports brand in the World. Its famous 'Swoosh' is instantly recognizable, and Phil Knight even has it tattooed on his ankle.
WEAKNESSES
↓ The organization does have a diversified range of sports products. However, the income of the business is still heavily dependent upon its share of the footwear market. This may leave it vulnerable if for any reason its market share erodes.
↓ The retail sector is very price sensitive. Nike does have its own retailer in Nike Town. However, most of its income is derived from selling into retailers. Retailers tend to offer a very similar experience to the consumer. Can you tell one sports retailer from another? So margins tend to get squeezed as retailers try to pass some of the low price competition pressure onto Nike.
OPPORTUNITIES
↓ Product development offers Nike many opportunities. The brand is fiercely defended by its owners whom truly believe that Nike is not a fashion brand. However, like it or not, consumers that wear Nike product do not always buy it to participate in sport. Some would argue that in youth culture especially, Nike is a fashion brand. This creates its own opportunities, since product could become unfashionable before it wears out i.e. consumers need to replace shoes.
↓ There is also the opportunity to develop products such as sport wear, sunglasses and jewellery. Such high value items do tend to have associated with them, high profits.
↓ The business could also be developed internationally, building upon its strong global brand recognition. There are many markets that have the disposable income to spend on high value sports goods. For example, emerging markets such as China and India have a new richer generation of consumers. There are also global marketing events that can be utilized to support the brand such as the World Cup (soccer) and The Olympics.
THREATS
↓ Nike is exposed to the international nature of trade. It buys and sells in different currencies and so costs and margins are not stable over long periods of time. Such an exposure could mean that Nike may be manufacturing and/or selling at a loss. This is an issue that faces all global brands.
↓ The market for sports shoes and garments is very competitive. The model developed by Phil Knight in his Stamford Business School days (high value branded product manufactured at a low cost) is now commonly used and to an extent is no longer a basis for sustainable competitive advantage. Competitors are developing alternative brands to take away Nike's market share.
↓ As discussed above in weaknesses, the retail sector is becoming price competitive. This ultimately means that consumers are shopping around for a better deal. So if one store charges a price for a pair of sports shoes, the consumer could go to the store along the street to compare prices for the exactly the same item, and buy the cheaper of the two. Such consumer price sensitivity is a potential external threat to Nike.
DATA ANALYSIS
1. Demography of respondents
ANALYSIS:
It was observed that the majority of the respondents consist of professional from various fields like engineers, software professionals, working executive etc. who effective form 38% of our database. While 36% were students from various fields. Others constitute designers and athletes etc. the further study is carried on the buying behavior of the above mentioned categories of consumer, which shows that our consumer is well educated and is very well informed about the product.
2. Consumer’s income level and spending capacity on shoes
ANALYSIS:
In the survey conducted a direct relation between the income level and the spending capacity was observed. Also it was found that students were spending in the range of Rs 1000 – Rs 3000 as compared to the working class professionals who were ready to spend between Rs 3000 – Rs 6000, since they have higher spending power because of higher income levels.
SHOPPING SEASON
ANALYSIS:
Amongst the student and the professional it was found the consumer buying BEHAVIOR does not change with respect to the seasons and occasion as most of the consumer would like to buy their shoes as and when need arises, whereas the businessman generally do their shoes shopping during traveling or on special occasion’s.
BRAND RECOLLECTION:
ANALYSIS:
When asked about reconciling a sports shoes brand about 70% of the respondent were able to recall REEBOK or ADDIDAS were as rest were able to remember NIKE and FILA brands. This was due to the fact that REEBOK has brand ambassador like RAHUL DRAVID and YUVRAJ SINGH.
FACTOR INFLUENCING THE BUYING PROCESS:
ANALYSIS:
Among the various factors like social, psychological, personal and cultural factors it was observed that the consumer give more preference to his personal choice and psychological factors like 50% of the people consider comfort and they generally do not consider durability as an important aspect because they believe that it comes along with the brand. Also the social factor like style was second most important factor behind the consumer buying motives.
(B) COMPARISON WITH OTHER BRANDS
ANALYSIS:
In response to the question about giving, out of 100 point to the various factors affecting their buying BEHAVIOR between NIKE and OTHER’S following was observed:
OTHERS NIKE
a. Style ____20____ ___30_____
b. Price ____10____ ___10_____
c. Comfort _____30___ ___30_____
d. Brand ____10____ ___20_____
e. Durability _____30___ ___10____
this further shows that the consumer look for style in the NIKE more in comparison to the other brand hence, gave their 30 points to it whereas 20 in case of other brands it was seen that the comfort remains at equal place even while choosing a competitive brand.
BUYING FORCES
ANALYSIS:
It was observed that consumer is forced by no factors like peer pressure, family and friends and some time people would like to buy a product because it is being endorsed by their favorite celebrity. It was observed that the beside that personal choice of the respondent, the pressure from the friends plays an important buying force for the students, while the peer and college in case of the professional and the least pursuing factor is family which was seen in case of the respondents belonging to age group 35 years and above.
NO OF PEOPLE BUYING NIKESHOES & REEBOK SHOES:
ANALYSIS:
This question was asked to know the market capture by the REEBOK and the time period of association of the customers with REEBOK. It was deduced that more than 75% of the respondents were using the REEBOK shoes and were mainly associated with it for a period of 1 year or more. While the remaining respondents were using either the NIKE or ADDIDAS brand shoes.
CUSTOMER SATISFACTION:
ANALYSIS:
Because of the quality product offered by the REEBOK about 60% of the respondents were either very satisfied or satisfied, while 10% did not gave any response as they were not using the REEBOK shoes.
3. Do you ask for a specific brand by name?
90% people say yes to this. and the remaining 10% say no.
4. Which brand do you generally use?
People in India prefer Nike the most as we can see that 24% % people prefer Nike sports wear. Then comes Adidas and Reebok.
5. Has any sports shoes ad (seen on TV/in a magazine) made an impact on you?
YES NO IF YES, THEN WHY
NIKE 43 57
ADIDAS 63 37
REEBOK 45 55
ACTION 30 70
Most of the people are influenced with Adidas’s ad, then with Reebok and then Nike. The most un-influential is that of action.
6. What according to you is the relative importance of the following?
V. Imp Imp. Not so Imp. Doesn’t matter
PRICE 50 28 12 10
DURABILITY 55 45 0 0
BRAND IMAGE 40 20 15 15
COMFORTABLE 54 36 10 0
LOOKS 40 40 15 5
By this we infer that the consumer wants the shoe to be durable that is of primary importance for them. Then the price is also very important for them. The shoe should be comfortable. Along with that looks and the brand image is also important.
7. What features of Nike do you like the most?
The most liked feature of Nike is the light weight shoe. Then it is the enhanced toe support. From here we can infer that most important aspect for the consumers is the comfort they get from the shoes.
8. What range you prefer?
Larger number of people goes in for shoes that come under the range of Rs. 1500-3500. A s we know that Nike is a premium brand 27% of the buy shoes that falls under the range of Rs. 3500-7500 and lesser no. of people buy shoes ranging in between 3500 and 5500.
9. How often you buy Nike?
62% of the consumers buy Nike only once a year. Here we notice one thing that some don’t buy Nike.
10. Are you satisfied buying Nike?
The people who buy Nike are fully satisfied buying it, their percentage is 64%. Only 15 % are not satisfied buying it.
11. Do you think Nike serves the purpose of being a good brand, for Sports wear?
56% of the people agree that Nike serves its purpose for being a sport brand. Only 27% people don’t agree with it.
12. Will you prefer Nike launching a new range which can serve the purpose of service class?
67% say yes to the idea of launching a new range for the service class. 36 don’t have any idea of this.
CONCLUSION & FINDINGS
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 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.
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.
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.
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.
OTHER SUGGESTION INCLUDE
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 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 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 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 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 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 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.
ANNEXURE
QUESTIONNAIRE
1 I buy my own shoes
↓ Very frequently
↓ frequently
↓ sometimes
↓ never
2 I find buying shoes a pleasurable event.
↓ Very frequently
↓ frequently
↓ sometimes
↓ never
3. I buy costly shoes
↓ Very frequently
↓ frequently
↓ sometimes
↓ never
4 for purchasing shoes, I can travel long distance
↓ Very frequently
↓ frequently
↓ sometimes
↓ never
5 I buy shoes which are liked by my family
↓ Strongly agree
↓ Agree
↓ Indifferent
↓ Disagree
↓ Strongly disagree
6 I buy shoes which are advertised attractitively
↓ Strongly agree
↓ Agree
↓ Indifferent
↓ Disagree
↓ Strongly disagree
7 I buy shoes which are advertised and endorsed by celebrity.
8 I like to buy shoes which are imported from Paris or Italy.
↓ Strongly agree
↓ Agree
↓ Indifferent
↓ Disagree
↓ Strongly disagree
9. I like to buy shoes which are designed in Paris or Italy.
10. I like to buy shoes which are very stylish & of latest design.
↓ Strongly agree
↓ Agree
↓ Indifferent
↓ Disagree
↓ Strongly disagree
11. I like to buy shoes which are less expensive but very stylish & of latest design.
↓ Strongly agree 30.00
↓ Agree 50.00
↓ Indifferent 14.00
↓ Disagree 4.00
↓ Strongly disagree 2.00
12. I Like to buy shoes which are not very stylish but comfortable (%.of Respondents)
↓ Strongly agree 10.00
↓ Agree 30.00
↓ Indifferent 18.00
↓ Disagree 32.00
↓ Strongly disagree 10.00
13. I Like to buy shoes which are not stylish but comfortable and long lasting
↓ Strongly agree
↓ Agree
↓ Indifferent
↓ Disagree
↓ Strongly disagree
14 I Like to buy shoes which are expensive & stylish but comfortable strongly agree
↓ Agree
↓ Indifferent
↓ Disagree
↓ Strongly disagree
15 I like to buy Nike shoes which are expensive & stylish but comfortable
↓ Strongly agree 8.00
↓ Agree 24.00
↓ Indifferent 4.00
↓ Disagree 2.00
↓ Strongly disagree 2.00
16 I like to buy Nike shoes which are not very stylish but comfortable
↓ Strongly agree 12.00
↓ Agree 16.00
↓ Indifferent 2.00
↓ Disagree 8.00
↓ Strongly disagree 2.00
17 I like to buy Nikeshoes which are not stylish but comfortable and long lasting
↓ Strongly agree 8.00
↓ Agree 16.00
↓ Indifferent 2.00
↓ Disagree 12.00
↓ Strongly disagree 2.00
18 I like to buy Nikeshoes which are not very stylish but comfortable
↓ Strongly agree 14.00
↓ Agree 16.00
↓ Indifferent
↓ Disagree
↓ Strongly disagree
19 I like to buy Nikeshoes which are less expensive but very stylish & of latest design.
↓ Strongly agree 4.00
↓ Agree 10.00
↓ Indifferent 4.00
↓ Disagree 14.00
↓ Strongly disagree 4.00
20 I like to buy Nikeshoes which are very stylish & of latest design.
↓ Strongly agree 2.00
↓ Agree 6.00
↓ Indifferent 8.00
↓ Disagree 22.00
↓ Strongly disagree 2.00
21 I like to buy Tailor made shoes which are very stylish & of latest design.
↓ Strongly agree 10.00
↓ Agree 38.00
↓ Indifferent 24.00
↓ Disagree 16.00
↓ Strongly disagree 12.00
22 I will certainly buy shoes if high quality matching imitation jewelry given free.
↓ Strongly agree 36.00
↓ Agree 56.00
↓ Indifferent 4.00
↓ Disagree 4.00
↓ Strongly disagree 0.00
23 I will certainly buy shoes if high quality imported scent given free.
↓ Strongly agree 38.00
↓ Agree 60.00
↓ Indifferent 2.00
↓ Disagree 2.00
↓ Strongly disagree 0.00
24 My expectation is fulfilled by my shoe supplier.
↓ Strongly agree 6.00
↓ Agree 24.00
↓ Indifferent 42.00
↓ Disagree 8.00
↓ Strongly disagree 0.00
↓ 25 Shoe companies should survey customer preferences.
↓ Strongly agree 24.00
↓ Agree 56.00
↓ Indifferent 16.00
↓ Disagree 2.00
↓ Strongly disagree 2.00
26 Shoe companies should suggest shoe design using celebrity.
↓ Strongly agree 32.00
↓ Agree 52.00
↓ Indifferent 14.00
↓ Disagree 2.00
↓ Strongly disagree 0.00
27 I know exactly what I want in my shoes.
↓ Strongly agree 8.00
↓ Agree 26.00
↓ Indifferent 24.00
↓ Disagree 22.00
↓ Strongly disagree 20.00
28 I don’t want to spend too much time on deciding my shoes.
↓ Strongly agree 28.00
↓ Agree 58.00
↓ Indifferent 8.00
↓ Disagree 6.00
↓ Strongly disagree 0.00
29 Stores display is the best form of advertisement
↓ Strongly agree 24.00
↓ Agree 48.00
↓ Indifferent 10.00
↓ Disagree 4.00
↓ Strongly disagree 0.00
30 T.V advertisement is the best form of advertisement
↓ Strongly agree 16.00
↓ Agree 52.00
↓ Indifferent 4.00
↓ Disagree 16.00
↓ Strongly disagree 12.00
31 Buying customized shoe by internet is very attractive.
↓ Strongly agree 24.00
↓ Agree 52.00
↓ Indifferent 4.00
↓ Disagree 16.00
↓ Strongly disagree 4.00
32 Buying customized shoe by internet is very attractive. But no spam mail.
↓ Strongly agree 16.00
↓ Agree 28.00
↓ Indifferent 2.00
↓ Disagree 10.00
↓ Strongly disagree 44.00
BIBLIOGRAPHY
BOOKS
Marketing Management - Philip Kotler
Consumer Behavior, 6th Edition, by Hawkins, Best ad Coney.
WEBSITES
Nikebiz : NIKE, Inc. Official Site, the world?s largest, leading athletic brand[/url]
Nike town:
Business.com: - The Business Search Engine and Business Directory for Business Information[/url]
Apna Bangalore: ]Apnabangalore.com [Home][/url]
Indiainfoline: Indiainfoline.com-Comprehensive information on stock market, equity, derivatives, companies, Commodities,Forex, Global markets, Mutual fund, IPO,Personal Finance, insurance, Loans, Credit cards,money,debt,mortgages,economy,sector[/url]
Nike’s online store for India: [
NEWSPAPER
Economic Times
Advertisement
