CONSUMER BEHAVIOR THEORY (NIKE)

The company was established in 1968.

Philip H. Knight is the chairman and CEO of the company.
Idea was given by Philip knight, then went to Japan to do project in tiger
shoes in Japan( one of the best shoes brands in Japan).
Previously company name was blue ribbon sports company later on he has
changed the name Nike.
Nike mainly concentrated on athletics, the main competitors was Reebok
and Adidas.
Now Nike’s having four billion dollar business but the problem is labour
practices.
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 "A consumer is an individual who purchases, has the capacity
to purchase, goods and services offered by marketing
institutions in order to satisfy personal or household needs,
wants, or desires."
Consumer behaviour, according to Walters (1974: 6),
What is represents specific types of human actions, namely those
concerned with the purchase of products and services from
Consumer marketing organisations.
behaviour ? According to Schiffman & Kanuk, the study of how
individuals make decisions to spend their available resources
(time, money, effort) on consumption-related items is termed as
Consumer behaviour.
Two different types of consumers can be distinguished,
namely personal and organisational consumers.
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Multiple
influences on
consumer
behaviour of
NIKE

Factor affecting the behaviour of NIKE customer

 Market Segments:
Nike has differentiated market segments of high, medium and low
end customers with varying income levels.
Thus, Nike segment on various fronts such as economic,
Segmentation, demographic, geographical differentiations.
Targeting and Economic Segmentation: High, medium and low income levels
which clubbed with there lifestyles.
positioning of Demographic segmentation: Segmented the market into age, gender
NIKE and class segments.
Geographical : On the basis of direction north, east, west and south.
Target Market:
Nike company has targeted the market of high-end, high income
level between age of 16-55 with a pan India location.
It is one of the area which differentiate NIKE from other brands like
Bata, Fila, Puma, Reebok.
 Positioning:
The brand has positioned itself in the minds of the consumer as a
high-end product which is quite costly but gives the value for money
Positioning and with its service, quality and designs.
Research Plan
Research plan Nike relates earlier STP analysis reports to create a market for its
of NIKE products .
Innovating new products and attain the first-in the market advantage
and charge a premium price.
Nike spends huge revenue into R&D of new products & customer
review.
Nike indulges into research analysis of consumer markets as well as
competitors' analysis.
Nike conducts qualitative and quantitative research.
Research on consumers attitudes, tastes, preferences and changing
pattern.
 Marketing mix consists of four P’s product, price, place and
promotion.
Product:
Marketing Nike provides features, designs, packaging along with extra features
like warranties and after sales services.
strategy Tendency of changing the designs and patterns after particular period
adopted by of time.
Warranty for their products and in some cases NIKE provides
NIKE replacements of the defective products.
Nike also provides packaging with the collaboration with other
brands.
For eg- Selling i-pods with jogging shoes range.
Price:
Nike has high-end consumer market with high income who asks for
better service and satisfaction.
 Pricing policy of NIKE is to provide value at high cost with
maximum profit.
Marketing Nike provides discounts during various festive seasons on its
products like in Diwali in India.
strategy Place
adopted by Multi-National organization.
Wide range of distribution channel.
NIKE Nike sells through different channel retail stores, brand outlets,
exclusive showrooms, online stores
Distributors
Factory outlets
 Promotion:
Extensively involved in Promotion and advertising.
Nike uses sales promotions, advertisement campaigns, public
relations and publicity.
Marketing Building brand awareness and brand image.
strategy Nike endorses various celebrities such as athletes, football players,
cricketers, tennis etc.
adopted by For Eg.- Roger Fedrerer, Tiger woods, Ronaldinho, Ronaldo.
NIKE Endorses various teams and clubs such as Barcelona Football Club.
Product promotions in movies and shows.
Sponsers various event such as tour de France, FIFA World cup,
Delhi Marathon.
Advertisement in Newspaper, Social Media like Facebook.
Cristiano Ronaldo Generated $500 Million In Value For Nike In
2016.
  Psychological core
There are three stages in the process of perception starts with
consumer exposure and attention to stimulus the consumer to
Psychological interpretation.
The first stage, exposure is the extent to people aware stimuli that
aspect of within range of their sensory receptors. For example, (eyes, ears, nose,
consumer mouth, fingers).
Second stage of perception process is attention, attention happen
behaviour when the stimulus activates the receptor nerves and send the result of
sensations go to the brain for processing. For example, Nike has
created visual identity with their ads through. television, newspaper
and to captures consumer attention.
 The final stage of perception process is interpretation, interpretation
mean that people assign to sensory stimuli.
For e.g:-NIKE selected Cristiano Ronaldo for their sports shoes
Psychological advertisement as it motivates youth to purchase NIKE shoes.
Cristiano Ronaldo Generated $500 Million In Value For Nike In
aspect of 2016.
consumer
behaviour
 Analyzing
Porter's Five
Forces
 Nike
•Low market growth rate.
•High aggressiveness of firms.
•Moderate number of firms.
Competitors Adidas
Analysis on the •High market growth rate.
•High aggressiveness of firms.
basis of •High number of firms.
Porter's Five Reebok
•High competitive market growth rate.
Forces •High aggressiveness of firm(few product is copied from nike,adidas)
•High number of firms.
Under Armour
•High market growth rate(USA).
•High aggressiveness of firms.(USA).
•Moderate number of firms.
 Nike
•Low switching costs.
•Moderate substitute availability.
•Small size of individual buyers.
Bargaining Adidas
power of •Low switching cost.
•Low to moderate substitute availability .
buyers or •Low to moderate size of individual buyers.
buyers force Reebok
•Low switching costs.
•Low substitute availability
•Low size of individual buyers.
Under Armour
•Low switching costs(USA).
•High substitute availability.(USA).
•Moderate size of individual buyers.
 Nike
•High overall supply.
•Large population of suppliers.
•Moderate size of individual suppliers.
Bargaining Adidas
power of •High overall supply.
•Large population of suppliers.
suppliers •Low to moderate size of individual suppliers.
Reebok
•Moderate overall supply.
•Moderate population of suppliers.
•Low size of individual suppliers.
Under Armour
•High overall supply(USA).
•Large population of suppliers..(USA).
•Moderate size of individual suppliers.(USA)
 Nike
•Moderate availability of substitutes (moderate force)
•Moderate performance per price of substitutes (moderate force)
•Low switching costs (strong force)
Threat of Adidas
substitutes or •High availability of substitutes.
•Moderate performance per price of substitutes.
substitution •Low switching costs.
Reebok
•Moderate availability of substitutes.
•Moderate performance per price of substitutes.
•Low switching costs.
Under Armour
•Low availability of substitutes.(USA).
•HIgh performance per price of substitutes.(USA).
•Low switching costs.(USA)
 Nike
•High cost of brand development.
•High economies of scale.
•Moderate cost of doing business.
Threat of New Adidas
Entrants or •High cost of brand development.
•High economies of scale.
New Entry •Moderate cost of doing business.
Reebok
•High to Moderate cost of brand development.
•Moderate economies of scale.
•Moderate cost of doing business.
Under Armour
•Low to moderate cost of brand development..(USA).
•Moderate economies of scale.(USA).
•Low to cost of doing business.(USA)
 http://smallbusiness.chron.com/application-consumer-behavior-
marketing
https://www.slideshare.net
https://repository.up.ac.za/bitstream/handle/2263/29162/02chapter
2.pdf?sequence=3
References http://slideplayer.com
http://wikipedia.com
http://panmore.com
https://www.porteranalysis.com
https://www.investopedia.com
Consumer Behavior: Marketing Strategy Perspectives
Book by Jerry Corrie Olson and Peter Drucker
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