DMA 411 CASE STUDIES
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Nov 24, 2024
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DMA 411 APPLICATIONS OF MARKETING RESEARCH CASE 1.2 NIKE-SPRINTS AHEAD OF THE COMPETITION, YET HAS ALONG WAY Q1: Should Nike switch from a focus on celebrities to focus on its products in its advertising? Discuss the role of marketing research in helping Nike management make this decision. What kind of research should be undertaken? Nike's decision to shift its focus from celebrity endorsements to product-centric advertising requires careful consideration and informed decision-making. Marketing research plays a crucial role in this process. Nike should conduct both qualitative and quantitative research to understand consumer perceptions, preferences, and the effectiveness of its current advertising strategy. Qualitative research Focus groups - organize focus group discussions to gather in-depth insights into consumers' attitudes towards Nike's current advertising approach and their preferences for celebrity endorsements versus product-centric ads. In-depth interviews - conduct one-on-one interviews with consumers to explore their emotional connections with the brand and understand how influential celebrity endorsements are in their purchasing decisions. Quantitative research Surveys - develop surveys to collect quantitative data on consumer preferences and the impact of celebrity endorsements on their likelihood to purchase Nike products. Sales data analysis - analyze sales data to identify any correlation between shifts in advertising strategy and changes in sales figures. Research questions -
How do consumers perceive Nike's current advertising strategy, specifically regarding celebrity endorsements? -
What is the impact of celebrity endorsements on consumers' purchase intentions for Nike products?
Hypotheses H0: There is no significant difference in consumer preference for Nike products between celebrity-focused and product-centric advertising. H1: Consumers show a higher preference for Nike products in product-centric advertising compared to celebrity-focused advertising. H0: Celebrity endorsements have no significant impact on consumers' likelihood to purchase Nike products. H1: Nike products endorsed by celebrities have a higher likelihood of being purchased by consumers compared to non-endorsed products. Q2: How would you describe the buying behavior of consumers with respect to athletic footwear? Consumer buying behavior for athletic footwear is influenced by various factors Brand loyalty - many consumers exhibit brand loyalty, favoring brands they perceive as providing quality, style, and performance. Nike's strong brand image contributes to this loyalty. Product performance - consumers often prioritize the functional aspects of athletic footwear, such as comfort, durability, and performance in sports activities. Fashion trends - style and fashion play a significant role, with consumers considering athletic footwear as a fashion statement. Trendy designs and collaborations with influencers can impact purchasing decisions. Endorsements and advertising - celebrity endorsements, as seen in Nike's previous strategy, can influence consumer perceptions and choices. Price sensitivity - price remains a key factor, with consumers balancing the perceived value of the product against its cost.
Word of mouth and reviews - recommendations from friends, family, and online reviews can heavily influence the decision-making process. Q3: What is the management decision problem facing Nike as it attempts to retain its leadership position? The management decision problem for Nike revolves around maintaining its leadership position in the athletic footwear market while expanding into new markets, particularly in the international arena. Nike needs to determine how to effectively balance its focus on product innovation, marketing strategies, and global expansion to sustain its competitive edge. Q4: Define the marketing research problem facing Nike, given the management decision problem you have identified. The marketing research problem for Nike is to understand how to optimize its marketing mix, including product-centric versus celebrity-focused advertising, pricing strategies, and market entry approaches, to retain its leadership position globally and successfully penetrate new markets. Q5: Develop two suitable research questions and formulate two hypotheses for each? Research questions -
How do consumers in target international markets respond to Nike's current marketing strategies, including product-centric advertising and celebrity endorsements? -
What factors contribute to the success of Nike's competitors in international markets, and how can Nike adapt its marketing approach accordingly? Hypotheses H0: There is no significant difference in consumer preferences for Nike's marketing strategies between domestic and international markets. H1: Consumer preferences for marketing strategies vary significantly between domestic and international markets.
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H0: Nike's competitors' success in international markets is not influenced by specific marketing strategies. H1: Successful competitors in international markets employ distinct marketing strategies that contribute significantly to their success. Q6: How can the Internet be used to help Nike in conducting marketing research and in marketing its products? Online surveys and feedback - conducting online surveys allows Nike to gather insights from a wide range of consumers globally. Online feedback forms and social media platforms can provide real-time opinions on products and marketing strategies. Social media monitoring - analyzing social media discussions and trends helps Nike understand consumer sentiment, preferences, and reactions to its marketing campaigns, allowing for quick adjustments. E-commerce analytics - utilizing data from online sales platforms provides valuable information on consumer behavior, purchase patterns, and popular product categories. Influencer collaborations - leveraging social media influencers and online personalities for product promotions can expand Nike's reach and appeal to younger demographics. Competitor analysis - online tools enable Nike to monitor competitors' activities, consumer reviews, and emerging trends in the athletic footwear industry. Global market research - online platforms facilitate cost-effective international market research, helping Nike tailor its strategies to specific cultural nuances and preferences.
CASE 1.3 LEXUS: IMPARTING VALUE TO LUXURY AND LUXURY TO VALUE Q1. Describe the management decision problem facing Lexus as it seeks to fight competition from other luxury car manufacturers such as Mercedes, BMW and Jaguar as well as competition from the “near luxury” autos like
Nissan Maxima and Mazda Millennia. Management decision p
roblem faced by Lexus in this case is “What marketing strategy should they
employ which help them retain their present customers, as well as helps them to gain new customers?”
The management decision problem facing Lexus is centered around formulating an effective strategy to compete with both traditional luxury car manufacturers (such as Mercedes, BMW, and Jaguar) and "near luxury" autos (like Nissan Maxima and Mazda Millennia). The challenge is to maintain and enhance Lexus's market position by addressing key strategic considerations in the face of diverse competition. This includes making decisions on product differentiation, marketing approaches, customer experience, and innovation to meet the evolving demands of luxury and near-luxury automobile markets. Q2. Formulate the marketing research problem corresponding to the management decision problem you identified in question 1. The marketing research problems, “To understand the characteristics and needs of customers with age group of 45 –
57, when they intent to purchase a luxury or near luxury car.”
Q3. Develop a graphical model explaining the customer choice process for luxury cars. Q4. Identify two research questions based on the definition of the marketing research problem and the graphical model. -
Can customers who buy Lexus can be segmented based on their income levels? -
Will the customers be loyal to the brand? Q5. Develop at least one hypothesis for each research question you identified in question 4. Hypothesis for Question 1: Lexus customers are loyal to brand due to the excellent features, image it is trying to associate and customer support provided. Hypothesis for Question 2: What is the definition of Luxury and Near Luxury Cars in Which car he/she can afford, e.g., Luxury, Near Luxury etc. Evaluate the options present in the market & what are his/her requirements Which brand does fulfill his/her preferences? Checks the brand image, heritage and what models available in the price range The model and brand which satisfies him/her is what he/she purchases
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perspective of the customers? Q6. How would you conduct an Internet search for information on the luxury car market? Summarize the results of your search in a report. -
Internet Analysis can be done by using Google Ad words. Using this, Lexus can display the car models on the pages which the customers visit and accordingly Lexus can determine the number of people interested in Lexus. -
Through various other Digital Marketing media like Search Engine Marketing (SEM), Lexus can get to know how many people are looking for the car and willing to know its features. Accordingly, Lexus can go for new technological advancements. -
Through social media marketing, Lexus can come to know about the strategic changes of its competitors and then can modify its own strategies.