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February 11, 2006
Does Nike Fit? Some Women Say No
I conducted a short series of interviews with everyday conusumers about the venerable Nike brand. What I learned was that a lot of women say Nike's are made for narrrow feet. The following highlights some other valuable information I gathered and outlines a basic marcom strategy consistient with it.
Nike is one of the world's most popular and innovative brands, recognized internationally for its embrace of sport, athleticism, and the spirit of competitiveness. Because the brand offers a wide range of athletic equipment and apparel that seek to serve a variety of consumers, the methods and tactics it uses to communicate its core messages and value is vital. This discussion focuses on several factors that were revealed in a series of interviews conducted with three consumers loyal to the brand.
A Brief Description of Nike
To get of very brief glimpse of Nike, I referenced their website. The organization was originally founded in 1962 as Blue Ribbon Sports. The company changed its name in 1972 to Nike, 'named for the Greek winged goddess of victory.' Today Nike directly employs some twenty-six thousand people, as well as approximately six hundred and fifty thousand in contracted factories worldwide. It is publicly traded on the New York Stock Exchange. It possesses an extensive network of retail and manufacturing operations, distribution centers. Under the Nike corporate brand, its own numerous athletic apparel subsidiaries that include Cole Haan Holdings, Bauer Nike Hockey, Hurley International, Converse Inc., and Exeter Brands Group, LLC.
The Interviews
I conducted a series of three interviews over a course of two days. The interviews were conducted in a relaxed, face-to-face setting with individuals that I know both personally and professionally. The interviewees were comprised of two females and one male. The females' ages were 31 and 33 and both were held advanced educational degrees; one was a primary school teacher with a Masters Degree in education, the other an Attorney. Both were single and had no children and pursued similar lifestyle habits relative to exercise and fitness. The male was 41 years of age, also possessed an advanced degree and was married with two children. His lifestyle factors relative to his personal exercise and fitness habits were somewhat similar to the females, although the impetus for this was mainly as a result of his family demands and not necessarily reflective of his personal motivation.
During the brief interviews, I asked each a series of questions that were aimed at revealing key data in accordance to the Communications Strategy Development Form within IMC: The Next Generation (181-182) by Schultz. The questions ranged from the basic - do you buy Nike, to more subjective, such as 'what does Nike mean to you?'
Key Revelations
The interviews uncovered several key pieces of information about the perceptions of the Nike brand, technical considerations of Nike footwear and the methods in which each were exposed to the brand and its messages. From the attitudinal perspective, the women described somewhat different thoughts regarding what the Nike brand represented to them. While they both described the main meaning of the brand to be 'sportswear' or 'sneakers' or products related to 'sports', they also offered insights such as 'empowerment', 'achievement' and even contrary factors like 'slave labor'. The male echoed similar beliefs of the Nike brand relative to sports-related 'footwear', but appeared more focused on 'victory', 'winning' and 'professional athletes'.
Beyond these subjective views, what was most interesting was the point that both females made relative to Nike technical factors of their footwear (namely sneakers). Both commented how the brand appeared to be designed for individuals with narrow feet. While both women noted that they remained partial to the brand and sought it out over other brands when making purchases, they both appeared noted that other brands often were more comfortable. Their male counterpart noted none of these, yet said he was influenced mainly by pricing factors and promotions at his time of purchase. Aesthetics were an important factor for all participants, but seemed to be weighed more heavily by the females. Another interesting factor that all noted the status factors like 'coolness' also played a role. This was more apparent in the female teacher and the male father. Both noted that they were positively influenced by the children in their lives; the teacher's pupils and the father's children.
As far as their methods of brand messaging reception, the females both noted that advertising was an influential, especially relative to new styles. The teacher and the father were additionally influenced by their children in considering Nike. Of the three, the lawyer female was also observant and influenced by her peers at the local fitness center she frequents.
The Communications Platform
In determining a basic communications platform for Nike, I reflected on the data gathered during the surveys to establish three core concepts. These include message delivery contact points, message content and creative execution.
In terms of message delivery, the strategy is to deliver messaging that at the right place and at the right time, using media that reflects the mainstream lifestyle factors. Nike currently appears heavily dependent on print advertising. While this would not fundamentally change, the range of publications and vehicles used would be adjusted. The strategy would be to augment the brands core athletic consumer base with exposure to consumers that pursue more varied activities beyond sport. This includes placement in homestyle publications, beauty publication and niche publications centered on business, management and profession practice. The goal is to connect with consumers in different contexts who might not necessarily be athletics and fitness focuses. Additional outlets would also include varied forms of interactive media, outdoor media and possibly more reliance on public venue sponsorships and placement. The strategy is to shift exposure away from sporting-centric media into lifestyle media to increase exposure to the 'everyday fit folk'.
Consistent with this media placement shift would be to communicate new messages relative to the shoes technical factors. While this may force major adjustments to the company's product lines, it was clear and consistent from the female interviewees that Nike shoes were targeted for individuals with 'narrow feet'. To compensate, I would pursue tactics that communicated changes on this level. Doing so could re-introduce many past loyalists and spur re-introductions to many sneaker consumers. Fortunately, this change could be introduced to compliment the needs of 'everyday fit folks' and introduced by utilizing the mediums above. Consistency in message could be achieved through both tactics.
Finally, in terms of the creative execution of these messages, all of the interviewees noted (in varying degrees) that they struggled with identifying with the brand's current 'superstar athlete mantra'. The bottom line in that they respected the brand for its quality, agreed with it core philosophies, yet didn't identify with many of the images that the brand currently projected. To address this, the creative tactics would center on the use of 'everyday folk' using Nike brands in common lifestyle activities that touched upon core fitness themes, yet were in contexts that everyday consumers could identify with. This could help the brand re-connect to aging brand loyalists who may not be running a marathon, but still appreciate comfortable and cool looking sneakers. Additionally, tactics would also center on celebrating 'everyday champions' like fathers, grandfathers, teachers, professionals and the like in an attempt to reinforce Nike's winning philosophy. The underlying strategy would be to connect the technical with the lifestyle and be delivered through appropriate media.
Reflecting upon the information I received from these interviews, it is clearly apparent that the Nike brand is held in high regard with adults. This is due to the fact that the brand has been around for much of these people's lives. Many of the brands key messages are firmly ingrained within this group. Unfortunately, however, the brand may not necessarily reflect their lifestyles or be reasonable to their needs. Nike can leverage its brand equity with this group by making adjustments to their products and the methods they use to communicate its value. Doing so may enable them to recapture significant market share within this group and reestablish relationships with many of these consumers. Pursuing this will force Nike to reexamine their core messaging tactics, the main messages and their delivery vehicles.
Posted by pgraber at 11:28 AM
February 02, 2006
Problems with Customer Value Formulas
Increasingly, marketers are relying on databases, histories, internal and external data, and information from a variety of sources in an effort to improve their marketing communications effectiveness. On such method being used is that of customer valuation formulas, which work to measure a consumer’s worth to an organization.
While many of these formulas are applicable in a range of circumstances, they are also problematic. This discussion outlines several areas in which Targetbase’s Customer Brand Value formula can be limited in offering a clear view of a consumer’s value.
The Customer Brand Value (CBV) formula by Targetbase seeks to measure the value of customer or customer group to a brand by combining four key factors. These include penetration, category-buying rate, share-of-purchases and contribution margin. As noted by Schultz in IMC: The Next Generation, this type of valuation method allows marcom managers ‘to build a basic platform for their marcom programs that encompasses what the program should be designed to achieve, how much they would or could be willing to invest, how returns could be measured, and – most importantly – how the firm should or could invest its finite financial resource among marketing communications target customers and communications alternatives’ (pg 114-115).
The first issue with this formula centers on the concept of context. Assuming for the moment that each of its elements can be trusted to be fairly accurate measures, all rely on historical measurements. This fails to take into account environmental changes. A core issue with current marketing communications practices is the nature of today’s marketplace and the opportunities it affords customers. Change today is a given, and as such, long-term anticipation of consumer habits nearly impossible to gauge. Due to the rapid development in technology – especially the Internet – this formula may overlook key threats or adaptations in the marketplace. While in certain instances (like consumer goods), this may be less of an issue, but in many commodity-based markets, democratization of buying and distribution channels needs to be considered. These changes can lead to quick buying behavior changes based on factors like convenience, cost and/or personalization. The formula anchors on the assumption of consistent, long-term buying and consumption behaviors that can change in an instant.
Somewhat related to overall context and seemingly imbedding into the equation is the concept of ‘corporate relevance’. This is the theory that the organization and its brand continue to maintain relevance in the eyes of the consumer and extrapolate this into quantifiable actions. Nowadays, relevance is especially challenging to maintain and cultivate long-term. Even the most established brands have periods where their relevance fluctuates. While it may be difficult to admit, it must be accounted for because it can have drastic effects on the behavior and consumption patterns of customers. If a brand loses luster or falls in this factor, it will certainly effect other factors. On the negative, drivers can be external (new advances, cost cutting), related to consumer shifts or even internal issues. On the positive side, if the organization is effective in addressing consumer desires and are able to increase their relevance, history becomes the baseline – not the true value.
These problems do not even consider the accuracy of the underlying data. While the formula’s ‘Contribution Margin’ can be seen as the most empirical, other measures like ‘Share of Purchases’, ‘Penetration’ and ‘Buying Rate’ are all somewhat subjective. Penetration assumes a symmetrical, easily identifiable marketplace. It might fail to quantify factors like complimentary products or the global marketplace. Share-of-Purchases and Buying Rate assumes an extremely in-depth knowledge of a customer segment – even in an age where it’s hard to even get someone’s email address. The point with all of these is simply: how accurate are these measures?
Another issue with this valuation method is it doesn’t address how the brand and its organization grows and adapts. As the company develops and introduced new products or services, consumers already participating with the brand may alter their behaviors in positive ways or negative ways. This can have effects on the entire brand family and their value. A perfect example would be the much-talked-about ‘halo’ effect that Apple is experiencing as a result of their iPod. More people are buying Macs, and more Mac loyalists have become re-invigorated with the brand. On the flip side, how many Ford buyers looking for a new car will buy Ford again? In both cases, contemporary developments at each brand effect a consumer’s brand value.
A final issue with this valuation method is that it fails to consider non-quantifiable factors of consumers in influencing those around them. There is an old saying that a happy customer tells no-one (not really true) and a dissatisfied one tells twenty. The point is that these behaviors – good and bad – aren’t measured in the formula. Goodwill and ‘badwill’ are huge. People influence other people; social networking and its derivatives are increasingly being valued today. The formula fails to take into account these ‘softer’ factors and only assumes that consumer behavior (in the form of purchases) contribute to value.
There are a number of ways for a brand to place a value on a consumer. Most rely on subjective ‘facts’ and measures in an effort to quantify behavior and map it to ROI. While this will continue to be a challenge regardless of the amount or quality of its underlying data, measures that factor in additional aspects can also be helpful.
Posted by pgraber at 08:52 PM