Management Decision Problem for Increasing Share of the Athletic Shoe Market

Introduction

NIKE has positioned itself as one of the leading brands in the US and across the world in the athletic markets. The success of NIKE can be explained in part by its focus on product design, brand positioning, and leader in corporate social responsibility. The primary driver of NIKE success can be attributed to innovation. The company has traditionally distinguished its brand through continuous brand innovation and market research from understanding customer's needs and preferences (Nike, 2009). NIKE moved from an emphasis on product quality to focus on strategic marketing decisions' that reflect the consumers. Agreements with celebrated athletes, sports teams and clubs, school and college athletics and celebrities have been the main marketing approaches. These approaches have been proven effective where NIKE experienced increase market share and high profits by partnering with athletes and sportsmen like Mike Tyson, Jordan and Tiger Woods (Hoovers, 2007). Sponsorship, collaboration, and endorsement decisions have allowed NIKE to experience a competitive advantage and increased sales in different parts of the globe.

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Currently, increased competition and changing customer needs and preferences have threatened sales and share in the athletic shoe market. To increase sales in athlete shoe market, the management must overcome a segmented market characterized by informed and diverse customers (Funk, and McDonald, 2016). Today, consumers are smart due to the availability of information and a variety of competitive products. The market is ever changing characterized by varying consumer needs and preferences. Customers have more purchasing power and access to different choices unlike before. The problem has been complicated by the availability of substitute athletic shoes from competitors. The marketing management is therefore faced with a tough decision regarding marketing expansion strategy that must be approached to increase NIKE'S share in the athletic shoe market.

Marketing research questions

The following questions will be used to achieve the objectives of research in marketing

• What are the current market expansion strategies that NIKE can use to increase share in athlete shoe market?
• What are the significant challenges that must be overcome to grow share in athlete market shoe successfully?
• What are the current factors that influence a customer's needs, preferences, attitudes, and behavior towards athlete shoes?
• What are the hindrances to innovation in new and different market segments?

Some of the current market expansion strategies, like collaboration with other companies, suppliers, manufacturers, and distributors are vital for business survival in a dynamic global environment. The benefits of cooperation and partnerships include access to raw materials, economies of scale and reduced vulnerability to risks (Adnan, 2018). For solid and successful partnerships efforts aimed to increase market share, commitment, skills and training improvement, commerce risks and goals compatibility cannot be ignored. Regular interaction with stakeholders drives some of the expansion stages like a business ecosystem, triple helix, business clusters, and networks. The communication has several implications for the company key among them needing to invest resources. To ensure trust between the business and stakeholders, the company will be compelled to share its innovations and ideas openly. Also, a need to create radical innovations may arise.

In an attempt to address customer needs, preferences and attitude, marketers may have to overcome challenges associated with rapidly changing markets. According to Felix, (2015), the company may have to set incur considerable expenses in marketing and research with delayed results. The complex process of satisfying customers' needs involves spending resources to translate the needs into innovative product features. Responding to these needs means that the company must accurately determine the requirements and find ways of successfully meeting them.

Graphical model

The concept map below illustrates customer's selection of athletes shoes based on different variables - brand loyalty, brand name, customers demographic factors and brand awareness. The fundamental idea in the map is that shoes with strong brand loyalty, name and high level of knowledge are more likely to be purchased. The loyalty of shoe is affected by customers trust in the shoe seller, the price of the shoe and the quality of the service. Current understanding of evidence-based studies is that high-quality services and high trust will lead to higher brand and therefore contribute to increased sales (Bowen and Chen 2015). Similarly, trust, shoe price, and quality are positively related with the brand name such that companies with the highly perceived name will attract more sales.

Demographic factors like buyers lifestyle- which affects their choice of shoe- age and income characteristics affect their purchase behavior. It is generally agreed that the younger generation with who engage in sports activities are more likely to purchase shoes. Besides, the level of the customer's income will influence whether they are price sensitive or not. Lastly, as seen from the concept map, advertising, brand name and celebrity endorsement have a positive effect on brand awareness (Awan, Siddiquei and Haider, 2015). Shoe companies like NIKE have invested in celebrity advertising, advertising, and creation of a reputable brand name.

Customers are therefore able to recognize NIKE shoe products and will likely select them instead of selecting shoes they have no awareness of its name, quality, design or price.

Adopting qualitative research methods to strengthen Nike's image

Qualitative researches provide non-quantifiable information since not all things can be described numerically. A good example of the application for qualitative research is an exploration of human behavior when making purchase decisions. NIKE marketing team can rely on qualitative data to understand customer's perception of a new NIKE product, their attitudes, and behavior. With qualitative research, it is possible to understand things that can be explained using quantitative methods (Bailey, 2014). Quantitative research usually involves a hypothesis and leads to the generation of continue or discrete data that can be coded into numbers. A conclusion can then be made by looking at numerical figures and patterns like mean, standard deviations, frequency, and medians.

According to Bailey, a qualitative researcher can explore buyers, managers, suppliers and other stakeholder's beliefs, behavior, attitudes, and feelings that are of interest to a given phenomenon (2014). Through qualitative data, NIKE can improve efforts to deliver on its promises by understanding how people perceive and behavior towards its products. It can get in-depth information to determine areas of innovation, employees behavior in the organization and current needs and preferences of customers.

Qualitative marketing research is a key ingredient of marketing decisions making. To successfully increase market share, NIKE must commit to marketing research to understand trends, variables, and preferences that affect customer satisfaction. Through market research, NIKE will not only understand preferences for multiple market segments but also identify who potential customers are, their wants and needs, how they want, availability, income, education, age and how much they are willing to pay. Market research helps in decision making by solving two main problems: identifying the problem with increasing share in the market and solving the problem (Bailey, 2014). These problems include research to understand market share, market potential, analysis of sales, branding, and market segmentation, pricing strategies, promotion methods as well as logistics and distribution research. Some of the main tools and approaches that NIKE can use to conduct qualitative studies include grounded theory, narrative approach, case studies, interview, discourse analysis, and ethnography.

Ethnographies pay attention to words and observation to explore human behavior. Ethnographers may use field works, observations and interviews to understand human behavior in different social contexts. For marketing research in NIKE, ethnography means exploring people's behavior in organizations and how they perform duties. Unlike ethnographies, the grounded theory involves deriving meaning and theories form the data per se (Khan, 2014). GT is widely used to understand human behavior and how people interact. In the qualitative narrative, the focus is on the participant's life experiences that can be written or provided orally with the aim of understanding patterns and behaviors of interest to the study (Lampard and Pole, 2015). Narratives can be in the shape of autobiographies where the participants provide a story of their lives and experiences. Discourse analysis is used to analyze verbal or written communication. They are useful tools for analyzing the nature of political marketing and understanding how people pass information to a large audience. Discourses are also important organizations to deliver information on the objectives of anew decision so that employees get a better grasp of management decisions by hearing directly from the management.

A case study, on the other hand, collects data by examining events on a specific group, individual or situation of interest. Case studies provide new information that lacks in the literature and helps bridge the gap that exists between theories and practice. Lampard and Pole, 2015), notes that case studies are useful in understanding complex problems such as corporate success or failure. The research pays attention to specific details that led to the success or failure of a corporate organization. By using case studies, the researcher gets a clear understanding of the prevailing business environment.

Using qualitative interviews to increase NIKE share in athlete shoe market

Interviews refer to well-planned conversations between two people. Since the problem facing NIKE is market expansion in the athletic shoe market, a clear understanding of current market dynamics and practices in multiple market segments is necessary. Interviews with marketing experts, sales personnel and buyers of athlete products cam generate enough information to inform management in decision making. Interviews as qualitative tools help uncover stories and issues behind the interviewee's experiences. Interviews, according to Lampard and Pole (2015), are performed to determine academic qualifications, experiences, preferences, beliefs, and attitudes that influence purchase decisions. Some interviewers will accompany respondents in the shopping activity to understand the complete process of purchasing. In other cases, the interviewer may set the scene for the respondent to give a stream of consciousness during the shopping activity.

References

Adnan, T. M. (2018). STAKEHOLDER MANAGEMENT IN COMPLEX PROJECTS: AN EMPIRICAL CASE STUDY.

Awan, H. M., Siddiquei, A. N., & Haider, Z. (2015). Factors affecting Halal purchase intention-evidence from Pakistan's Halal food sector. Management Research Review, 38(6), 640-660.

Bailey, L. F. (2014). The origin and success of the qualitative research. International Journal of Market Research, 56(2),.

Bowen, J. T., & Chen McCain, S. L. (2015). Transitioning loyalty programs: a commentary on "the relationship between customer loyalty and customer satisfaction." International Journal of Contemporary Hospitality Management, 27(3), 415-430.

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