AN ASSIGNMENT

ON
Review and Discussion Question Solving (1&2) of Chapter-4
And Case Study Solving: Nike
Course Name: Consumer Behavior
Course No: MKT-415

Submitted to
Shah Alam Kabir Pramanik
Assistant Professor,
Department of Marketing,
Islamic University, Bangladesh. Submitted by
Md. Khalid Hasan Badhon
Roll Number- 1625017
Reg. Number- 1687
Session: 2016-17
Department of Marketing,
Islamic University, Bangladesh.

Date of Submission: 16th March 2020.

Review and Discussing Questions:
 1. Select a product category and identify examples of product forms, brands and
models. Describe some of the attribute, consequence, and value meanings for each of
these levels.
 2. Analyze the possible meanings of mouthwash or deodorant in terms of positive
(perceived benefits) and negative (perceived risks) consequences of use. Why are both
types of meaning important?
 Answer to the Question No. 01

Selecting a product category and identifying examples of product forms, brands and models:

I select here two product categories. Those are:

i) Soap

ii) Tissue

I identify some examples of soaps and tissues product forms, brands and models. Those are given
below:

Levels of product knowledge

Product Class Product Form Brand Model/Feature

Soap Body wash Unilever Pears

Hand wash ACI Savlon
Detergent Unilever Surf excel
kitchen cleaner RB group Lysol

Tissue Facial tissue Bashundhara Bashundhara paper

napkin
Toilet tissue Meghna group Fresh tissue

Describing some of the attribute, consequence, and value meanings for one of these levels:

Brand Attributes Consequence Values

Premium fabric wash Quick wash Be comfortable

Unilever
(Surf excel)

Decrease cloth overuse Low self esteem

lifetime
 Answer to the Question No. 02

Analyzing the possible meanings of mouthwash or deodorant in terms of positive (perceived

benefits) and negative (perceived risks) consequences of use:

Consumer can think about the positive and negative consequences of product use as possible
benefits or potential risks. Benefits are the desirable consequences consumer seek when buying and
using products and brands. And perceived risks concern the undesirable consequences that
consumer want to avoid when they buy and use product.

Mouthwash or deodorant is a consumer product. That has also some perceived benefits and
perceived risks.

 Perceived benefits of mouthwash or deodorant:

a) Functional benefits: For mouthwash or deodorant – It can be reduce bed smell of mouth and give
refresh felling.

b) Psychosocial benefits: People come closer to me. And like my teeth.

 Perceived risks of mouthwash or deodorant:

a) Physical risks: The bottle of mouthwash can be destroying.

b) Financial risks: I can buy different brand product which one is cheap and good quality.

c) Functional risks: It doesn’t work well. Germs don’t go away.

d) Psychosocial risks: It can’t reduce bed smell of mouth so people don’t come closer to me.
Case Study Solving: Nike
Twenty-five years ago, Nike stuck its foot in the door of sports by providing better shoes for
competitive athletes. Simple. All it took was a passion for sports, a few good ideas, and the will to
make it happen. Today, much in the world has changed. Athletes are stronger and faster than ever.
Competition is more intense than at any other time in history. When combined with advances in
performance that technology can provide, the world frenzy for sports grows unabated. Twenty-five
years from now, no one knows what the world will be like. But we’re thinking about it. We believe
in it. We know that curiosity and a competitive spirit will be alive and well. We know that we will
be there, helping athletes perform better. All it will take is a passion for sports, a few good ideas,
and the will to make it happen. Over and over again.” With these words, Nike began its 1997 annual
report and revealed the core values of this highly successful company. It all started quite humbly. In
the 1960s young Philip Knight, CEO of Nike and former track star at the University of Oregon,
partnered with his old track coach, William Bower man, to sell running shoes to athletes. They
drove to high school track meets and sold shoes out of the trunk of Knight’s car. As it grew, the
young company found itself perfectly timed to cash in on America’s running craze in the 1970s.
Nike sold $3 million in shoes in 1972, $270 million in 1980, and $1 billion in 1986. It has not been
all easy running for Nike. After its initial success in the 1970s, the company stumbled a bit in the
mid-1980s. For one thing, demographic changes worked against Nike as the baby boomers pushed
into their forties and felt less like running. Fewer people were taking up jogging, and those who did
were doing fewer laps. Also, the market for running shoes had become highly segmented—a sure
sign of a mature market—with many different models for every nuance of consumer need. In
addition, price cutting was beginning to show its ugly head. Thus, Nike’s unit sales of running
shoes decreased 17 percent in 1984, and its market share declined in that year from 31 percent to 26
percent. The decline continued, and by 1987 Nike had only an 18.6 percent share of the market for
athletic shoes, a market it had dominated just a few years earlier. Another problem for Nike came
along in the 1980s: competition. Reebok in particular created a new marketing orientation to selling
sneakers based on fashion rather than performance, which Nike had emphasized (and still does).
According to Reebok president Paul Fireman, “We go out to consumers and find out what they
want. Other companies don’t seem to do that.” Fashion seemed to be what many consumers wanted
in the mid-1980s. Reebok’s soft-leather athletic shoes in fashion colors took the market by storm.
Reebok sales increased from $84 million to $307 million in one year (1984 to 1985), and Reebok
took over the top spot from Nike in 1986. Perhaps consumers’ interest in fashion should have been
obvious by simple observation. Research showed that 70 to 80 percent of the shoes designed for
basketball and aerobic exercise were actually used for casual street wear instead of the intended
sports. Nike fought back with technological features intended to enhance performance. In 1987,
Nike introduced air inserts into the soles of its high-end shoes. The key model was the Air Jordan,
the basketball shoe named after Michael Jordan, the superstar player for the Chicago Bulls. Nike
also had the brilliant idea of producing its top-of the-line models with a cutout in the sole so the
consumer could actually see the attribute (encapsulated gas or “air”) that provided the cushioning
benefit. Over the years, a key strategy for Nike has been to create shoes with special technical
attributes (air inserts, stability reinforcement, lacing patterns) that would enhance performance.
Knight also signed up star athletes to wear Nike shoes and serve as spokespersons, a strategy he
used from the beginning. The most desirable spokesperson was what the company executives called
“a Nike guy”: a brilliant athlete with a competitive attitude and a somewhat rebellious demeanor.
Michael Jordan became the Nike guy in the late 1980s. Nike spent very heavily on TV and print
advertising to promote both Jordan and his shoe model. All this advertising was a rather unusual
marketing strategy for the company that once eschewed mass advertising as unnecessary and
somewhat demeaning, but the threat from Reebok loosened Knight’s thinking about advertising. By
the mid-1990s, some 35 ads later, Michael Jordan was the most popular athlete in the country.
Currently it is estimated Nike pays out more than $100 million a year to contract athletes to use and
pitch Nike products. Nike spokespersons have included Andre Agassi in tennis, Alex Rodriguez in
baseball, Carl Lewis and Michael Johnson in track and field, Bo Jackson for multisport shoes, and
basketball players such as Kevin Garnett and Scottie Pippen. Nike adds new sports continuously,
including mountain biking, climbing, and hiking. Nike made the plunge into golf by signing a five-
year, $40 million contract with Tiger Woods. Woods not only wears Nike clothing and shoes and
appears in commercials, but also switched to a Nike golf ball in 2000 and promptly won the U.S.
Open tournament by a record margin. Later that year, Nike signed a new deal with Woods that pays
him an estimated $100 million over five years. As usual, Nike also signed up women sports stars to
wear and promote its products (the Nike Web site profiles several prominent female athletes, such
as track and field star Marion Jones). Nike’s print ads have portrayed women trying to excel in
sports. A Nike ad in 1996 showed little girls imploring their parents for a ball, not a doll, for
Christmas. pet04764_ch04_066-098.indd 97 11/16/09 5:56:13 PM Nike faced a new set of
challenges in the late 1990s. For one thing, the shoe market had changed. Many younger consumers
eschewed athletic shoes in favor of hiking boots and more casual footwear. Plus, more teens began
participating in nontraditional “extreme” sports like snowboarding and skateboarding. Nike did not
have a product that successfully appealed to this segment of the shoe market. To a lot of teens, Nike
had ceased to be cool. The company responded in 1999 by establishing a separate division called
ACG (which stands for “all-conditions gear”). The ACG unit has designed a line of shoes and
apparel that bears the distinctive ACG logo rather than the familiar Nike swoosh. Nike also added
extreme athletes like snowboarder Mike Michalchuk to its roster of star endorsers. The opening
statement to the 1997 annual report indicates Nike’s commitment to sports. As a company, Nike is
fascinated with the dedication and effort needed to excel in sports and the satisfaction such
achievement provides the athlete. Nike goes beyond a concern with mere product attributes to focus
on the personal benefits associated with using its products and the values satisfied by product use.
Nike’s advertising is designed to “make a connection” with the consumer, according to Dan
Wieden, manager of Wieden& Kennedy, Nike’s main advertising agency. Thus, Nike ads seldom
pitch the product directly or talk about product attributes. In fact, some ads do not even mention the
company’s name, featuring instead only the swoosh logo. Most Nike ads seek to portray the core
values of sport as Knight sees them (striving, effort, achievement, satisfaction). Most Nike ads
activate these meanings and their associated emotions and moods, which then become linked to the
product. Thus, for many consumers, Nike has an image that stands for performance, competition,
achievement, and doing your personal best. Despite its recent troubles, Nike is still a remarkable
corporate success story. Philip Knight has transformed a simple sneaker into a set of symbolic
meanings. Since the dark days of the 1980s, Nike has become one of the most powerful brand
names in the world, in a category with Coke, Levi’s, Disney, and Hallmark. Although overall sales
dipped 8 percent in 1999 to $8.8 billion (with profits of $451 million), Nike’s position atop the
athletic footwear market is still secure, at least for now. By comparison, Nike’s closest competitor,
Reebok, recorded sales of just under $3 billion, with profits of $11 million, in 1999. Nike’s
worldwide shoe sales hit $5.2 billion (40 percent market share), while it raked in an additional $3.1
billion in sales of clothing and equipment. Of course, Nike has many viable competitors besides
Reebok to worry about, including Adidas, Fila, and Converse. We can be sure the sneaker wars will
continue.

Discussion questions and answers:

1. Apparently there are two market segments of consumers for many product forms of
athletic shoes--those who use the shoes to engage in the designated athletic activity and those
who primarily use the shoes for casual wear and seldom engage in the athletic activity.

a. Discuss the differences in means-end chains between these two segments, especially
their end goals, needs and values for running, basketball, aerobic, or tennis shoes.

Answer: In the question we can see that there have two market segments. Those are:

1. Shoes for participate in the athletic activity and

2. Shoes for not participate in the athletic activity.

Now, discussing the differences in means-end chains between these two segments especially their
end goals, needs and values:

1. Shoes for participate in the athletic activity:

 Athletes want technical features that are directly related to performance.

 They want to avoid injury by shoes.

2. Shoes for not participate in the athletic activity:

 Non athletic users may be interested in styles.

 They think about their fitting.
 They also think about colors.
 Social recognize by other.

Those are the differences between those two. Because means-end chain that links the product
attributes to the self-relevant so end might be quite different. But some end values may be the same
for these two groups of consumers such as self-esteem.
b. Draw means-end chains to illustrate your ideas about how these two segments differ.

Answer: Drawing the means-end chains to illustrate my ideas about how these two segments differ:

Shoes for participate in the athletic activity:

Brand Attributes Consequence Values

Comfortable Run longer be physically fit/good health

Nike

Huge weight Not look cool Not sustain a long time

Shoes for not participate in the athletic activity:

Brand Attributes Consequence Values

Good style Look cool Live a long life

Nike

Color may be vanish less quality low self esteem

c. What types of special difficulties does a marketer face in promoting its products to two
segments of consumers who use the product in very different ways?

Answer: There are different types of special difficulties does a marketer face in promoting its
products to two segments of consumers who use the product in very different ways:

Developing marketing strategies for two different consumer segments can be difficult for a
marketer. Marketers should carefully analyze the customer-product relationship in each target
segment and develop promotion strategies that are appropriate for each one.

Customer who, use the shoes to engage in the designated athletic activity that is easy for marketer
for promoting their products. Cause marketers know the needs and wants of customer. Such as-
Athletes want technical features that are directly related to performance, they also want to avoid
injury by shoes.
In case of non athletes their needs and wants are different from one to another. Such as- Non
athletic users may be interested in styles, they think about their shoe fitting, they also think about
colors and social recognize by other.

So above discussion, we can say the casual user would be more difficult to target efficiently.

2. Discuss your reaction to Nike’s handling of the criticism of its overseas plants. In your
opinion, what are Nike’s ethical responsibilities in this situation?

Answer: In mid 1990 Nike has found something more difficult to solve the controversy
surrounding its overseas labor practices. Critics said-

 Some employed young children

 Paid substandard
 Mistreated their employees.

For that protests arise to the cities and college campus. At that type of situation Nike created a new
position for a vice president for corporate and social responsibilities and hired a former Microsoft
public relation guru to fill the role. In my opinion Nike’s have some ethical responsibilities in this
situation. They shouldn’t recruit young children. They should provide more facilities to the
employees. They didn’t mistreat to their employees etc.

3. Nike has expanded its product line well beyond the original running shoes. It now
includes models for virtually every type of sport or physical activity. Visit the Nike web site
(http://www.nike.com) for a complete listing of the models it sells. Moreover, Nike continually
introduces new models—on average Nike introduces a new shoe style every single day of the
year. Discuss the pros and cons of this continual churn of new attributes and new products.
How do think consumers react to this?

Answer: Discussing the pros and cons of this continual churn of new attributes and new products:

Pros of this continual churn of new attributes and new products:

 Large verities of goods keep customers engaged.

 Large sales imply large revenues.
 Money received from sales can be further used for R&D purposes
 The presence of brand in the complete sports market will increase, which will get customers
attracted.
 Advertising expenditure would fall.

Cons of this continual churn of new attributes and new products:

 Large stock of unsold products is a waste of both money and resources.

  If a customer is unhappy with one product of the brand, it will shy away from trying other
products as well.
 Customers might think that the brand has no particular specialization product and might
start doubting its quality.

Customer reaction:

 They will get the latest design of shoes.

 A lot of choice in making select depends on their preference.
 Customers will find the Nike shoes are trendy.

4. Discuss Nike’s typical advertising strategy in terms of the types of means-end

connections it creates in consumers. Bring in an example of a current Nike ad to analyze and
draw out the meaning connections you believe this ad is likely to create in a consumer.

Answer: Nike’s does spend on marketing and for many years has used TV media has a common way
to target their consumers with creating means-end connection and also showing the value in their
products.

Nike has also created slogans “Just Do It” tied to all their advertisements and products with the
Swish logo to show how determination of the user and the product creates athletic strong results
that are not normally achieved. Research on involvement, brand equity, and especially on
measurement of the meanings created for consumers through means-end chains, has given an
analytic framework for furthering this understanding. The objective of many brands is to establish a
relationship with consumers and to link the brand with consumers’ end goals, transcending just
functional benefits. This becomes important in categories when functional or physical benefits
cannot sufficiently distinguish one brand from another. Yes I believe that this ad is likely to create
in a consumer.

5. Recently Nike abandoned the swoosh logo in its advertising and replaced it with the
word “Nike” in lower case lettering. Why do you think they made this decision?

Answer: In 1997 Nike establishing a separate division called ACG (all-condition gear), designed a
line of shoes and apparel that bears the distinctive ACG logo rather than the familiar Nike swoosh.

 A new image consistent with the changing environment in sport athlete

 Try to make an innovation to maintain its popularity in high competition market
 However, even Nike is not beyond trying to spruce up their image.

The accompanying ‘Nike’ font style has been altered many times, in an attempt to keep up with
changes in taste and design sensibility.

6. What do you think of Nike’s attempt to reach the “alternative” market through its
ACG unit? What barriers and opportunities exist? Should ACG deviate from Nike’s
traditional advertising strategy to reach these consumers?
Answer: Many consumers in the alternative market have somewhat different means-end chains for
shoes than consumers who buy Nike’s basketball shoes. While a basketball player might want to
buy Nike shoes because of the brand’s reputation, a mountain biker might avoid Nikes because they
are too mainstream.

Because of this, Nike’s brand equity could be a positive or a negative as it expands its product line.
Alternative consumers might respect Nike’s reputation for quality, but might also be wary of its
corporate image or widespread popularity. The Nike swoosh and name likely carry different
meanings for a white, suburban skateboarder than they do for a young, African-American basketball
player living in an inner city.

Nike’s tradition of emphasizing performance might or might not work with its ACG branded shoes.
Alternative consumers may be looking less at performance and more at how their shoes project a
certain lifestyle image. These people might cast a cynical eye toward the big-budget, hype-filled ads
that helped Nike attain success with its basketball and running shoes.

7. Not everyone finds athletic shoes highly involving, but some people do. For example,
kids who are “into shoes” can talk in staggering detail about the characteristics and benefits
of the 1999 and 2000 Air Jordans. Identify some intrinsic and situational sources of
involvement for athletic shoes, and describe some of the means-end chains for the most
involved people. Discuss how Nike’s advertising strategies might differ in marketing a shoe to
highly involved and moderately involved consumers.

Answer: “Involvement” is “having personal relevance.” This can happen because of reasons
intrinsic to the consumer. For example, consumers may be interested in running or basketball as a
sport. It can also be created through situational factors like a sales promotion, celebrity
endorsement, or current “fad” where the consumer is motivated by factors other than the activity or
the brand.
Most brands have a mix of consumers ranging from the intrinsically involved to the situational
involved. Clearly, brands need to cater to both these groups and need to address them differently.
Ask students to take examples of products that they are involved with and those that they are not
involved with to highlight differences between them. Ask them to speculate what sorts of appeals
would work for them as consumers in each of these different situations.