Market Research Report: Nike's Business Casual Shoe Opportunity

This report presents market research conducted to assess the viability of Nike Inc. expanding its product line to include business casual shoes for men. The report begins with a situation analysis, providing an overview of Nike's company profile, vision, mission, product lifecycle, brand positioning, sales, key distribution channels, and competitors. The core of the report focuses on market research, defining the problem, detailing the research methodology, data collection, and characteristics of the sample, which primarily included males aged 17-21. Key findings reveal consumer preferences for a stylish, comfortable, leather shoe with a rounded toe box, priced between $75-$124, and without the visible Nike logo. The research indicates a significant opportunity for Nike to introduce a business casual shoe line, targeting young professionals and leveraging online communication strategies. The report concludes with recommendations for Nike's product line expansion, supporting the potential for market success and providing references to external sources such as Allied Market Research, Bloomberg, and Macrotrends.

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Executive Summary
Nike Inc is the front line of the stuff to keep customers discussing a brand and
they are unquestionably at the highest point of the natural way of life in the world of
athletic apparel and equipment. Their branding is a strong logo and in mix with
having their finger their finger on the pulse of new technological advancements. They
are always innovating, however they are missing out on a potential opportunity to
further increase their market share and expand their product: The business Casual
Shoe. The market research is to determine whether a line of business casual shoes for
men would be a beneficial addition to Nike’s assortment of goods based on their
marketing strategies and current audience. Demographics of Nike’s customers
indicate that many of them are young professionals, and given that information, a
more stylish, professional shoes seems like the obvious next step.

Contents
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7.0
Situation Analysis ………………………………………
1.1 Company Profile ……………………………………
1.2 Vision and Mission Statement ……………………...
1.3 Product and Product life Cycle ……………………..
1.4 Brand Position ……………………………………...
1.5 Sales and Key Distribution …………………………
1.6 Competitors …………………………………………
1.7 Demographics and Market Strategy ………………..
Market Research
2.1 Problem …………………………………………….
2.2 Problem Definition …………………………………
Primary Research Information ………………………….
3.1 Research Methodology ……………………………..
3.2 Data Collection ……………………………………..
Characteristics of the Final Sample …………………….
Summary of Research Findings ………………………...
Casual Shoe Market Summary …………………………
Conclusions ……………………………………………..
References ………………………………………………
Appendix A ……………………………………………..
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1.0 Situation Analysis
1.1 Company Profile
Name of Company : Nike Inc
Company Logo : Correct or Swoosh
Business/Industry : Apparel and Textile Products (Primary)
Apparel, Footwear and Acc Design (Sub)
Operation Geography : United States, Global
No of Employees : 76,700 (Worldwide)
About Cisco Systems : Nike was founded on January 25, 1964. The founders of
Nike are Bill Bowerman and Phil Knight. Its original name was Blue Ribbon Sports
(BRS). The company initially operated as distributor for Japanese shoemaker
Onitsuka Tiger, which meet Knight’s automobile (Nike Inc, 2019). But the
relationship of BRS and Onitsuka Tiger was coming to end and BRS made its own
line of footwear in early 1971.The business officially became by Nike and then was
registered with the U.S Patent and Trademark Office in May 30, 1971. Nowadays,
Nike is known to be the largest sports organization in the world.
1.2 Vision and Mission Statement
Vision
The Nike goal is to carry on his legacy of innovative thinking, whether to develop
products that help athletes of every level of ability to reach their potential, or to create
business opportunities that set Nike apart from the competition and provide value for
our shareholders.
Mission
To bring inspiration and innovation to every athlete in the world.
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1.3 Product and Product life Cycle
Nike, Inc. designs, develops, and markets athletic footwear, apparel,
equipment, and accessory products for men, women, and children.
Life Cycle
 Nike is as of now in the development cycle of their brand total life cycle.
 They have developed to become global and, in that capacity, they have high
brand control and a universally perceived logo.
 The primary aspect in which the company is currently growing is their
research and development.
1.4 Brand Position
Nike associates with high-level athletes, giving them with innovative and
superior athletic equipment. They are number on in performance, and number one in
the sporting gear industry. Nike’s business overtakes some of other major brands
available to consumers such as Adidas, Puma and Reebok, etc.…
1.5 Sales and Key Distribution
Nike annual revenue history and growth rate from 2016 to 2019 (Macrotrends,
2019). Revenue can be defined as the amount of money a company receives from its
customers in exchange for the sales of goods or services.
2015 2016 2017 2018 2019
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$30.60 $32.37 $34.35 $$36.39 $$39.11
Nike's Annual Revenue (Billions of US $)
 Nike revenue for the twelve months ending Aug31, 2019 was $39.82B, a
6.85% increase year-over-year.
 Nike annual revenue for 2019 was $39.11B, a 7.47% increase from 2018.
 Nike annual revenue for 2018 was $36.39B, a 5.96% increase from 2017.
 Nike annual revenue for 2017 was $34.35B, a 6.1% increase from 2016.
Figure (1) Sales Revenue of Nike (2015-2019)
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Channels
Nike’s current brand marketing strategy is to sell their products to retail stores,
and through independent licensed stores. The company comprises 346 retail outlets
across the US. Of these, 145 are Nike factory stores which carry primarily overstock
and closeout merchandise, 12 Nike stores which also house Nike Women stores and
11 are Nike Towns which are designed to shelve Nike branded products and three
stores are Nike employee-only stores. Below chart numbers reveal that Nike
distribution is inferior in eastern countries and therefore Nike have to develop plans to
increase the product flow within the distribution chain.
42%
21%
15%
12%
6% 4%
Percentage of distribution pie chat
North America West Europe Emerging Markets
China Central and East Eurpoe Japan
Figure (2) Nike’s distribution pie chat
1.6 Competitors
 As of Nike, their key competitors are Adidas, Puma, New Balance and
Sketchers.
 In terms of revenue, Nike is number on in the market of athletic shoes
compared to their key competitors.
 Adidas is currently Nike’s biggest competitor, but revenue generated by both
Puma and Sketchers are not currently substantial enough to pose any threat.
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1.7Demographics and Market Strategy
Demographics
The demographic of Nike products are males between the age of 25-34 years
old. Some have graduated college, but the majority have not. Their occupations range
from professional to sales and office jobs. Their average household income is between
$75000-$149000 and located in the southern region of the United States. They are
married with children and own their home that values between $200,000-$500,000.
Market Strategy
Target audience: Nike’s target audience is 20-40 year olds who utilize their
products as multipurpose for fitness and fashion. The twenty-year-old in particular is
a very active in online communities and engages in digital media daily.
Focus group summary: Age is very relevant to shoe style. It will be important
to define a gap between Nike athletic and Nike business casual shoes. Nike’s
consumers preferred a traditional style shoe and colors (black, brown and tan) and the
price cannot exceed $130 for a pair. If Nike did come out with a business casual shoe
it needs to be something that can be worn, Monday through Friday, semi-casual and
needs to be different from the other current business casual shoe brands currently in
business. It is unappealing to have the Nike Swoosh logo visible on the outside of the
shoe. These were three visuals shoe which Nike will produce.
Communications: The communication strategy for Nike are mainly online. Nike has
switched from print and television to online. Since the launch of Nike and Nike Fuel
band consumers have been able to interact with Nike fitness products digitally.
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2.0 Market Research
Market research is synthetic gathering, recording and analysis of data about
issues or discover related to marketing products and services. Market research allows
a business to make decisions which could bring profit in to the organization.
2.1 Problem
Shoe1 # Within organization, some of employee loved the shoe style just not the
color. They liked the clean look of slip on. This opinion was unanimous.
Shoe2# Positively to this shoe. They liked the breathable leather and the style. But
still current with the pop of color on the sole.
Shoe3# Nike thought that this style was better off for an older age group. As some
employee thought it was boring, conservative, plain but they did like the color.
2.2 Problem Definition
 Measure the percent of males ages 18-30 would need or purchase a casual
shoe.
 To understand purchase interest across different price and to assess consumer
preferences to designs, colors and materials
3.0 Primary Research Information
3.1 Research Methodology
Distributed self-administered surveys, consisting of 10 questions as Appendix
A. Due to the nature of the research and objectives only males were able to complete
this survey. Females were filtered out after the first question about gender
3.2 Data Collection
The survey was available through surveyworld.com. As a whole, the group
posted mass and individual messages with this survey link,
https://www.surveyworld.com/2019Nikesurvey through Facebook, emails and twitter
to friends and family.
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4.0 Characteristics of the Final Sample
During the course of research, this survey targeted Males, more than half of
customer/participants were between the ages of 17-21. The majorities of males
between ages 17-21 are in college and have an annual income of less than $10,000
before taxes.
In total, 45% had an overall opinion of Nike that was “good”. Out of the total
65% responses, 47 male participants currently own business shoes. In which, just over
1/3rd were “Somewhat satisfied” with their last business casual shoe. The survey
confirmed that as a whole, the majority of male participants wore business casual
shoes once a week, however those between the ages 17-21 wore a business casual
shoe only once a month.
How satisfied were you with your last business casual shop
purchase?
Very Satisfied Somewhat Satisifed Neither Satisfied or Dissatisfied Somewhat Dissatisifed
Very Dissatisfied
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Special Occasions
Job Interview
Restaurants and Bars
Work
Everywhere
0 5 10 15 20 25
Where do you wear your business casual shoe?
Comfort Style Color Price
0
5
10
15
20
25
What is the most improtant trait in a business casual shoe?
Almost 2/3rd of Males ages 17-21 believe that the most important trait in a business
casual shoe is style. The next leading trait is comfort, with about 1/3rd response from
the ages of 17-21.
Rounded Toe Box Square Tox Box No Preference
0
2
4
6
8
10
12
14
16
When Considering the shap of a business casual shoe and prefer?
Overall participants want a rounded toe box and for the shoe to be leather.
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Leather Faux Leather Suede Treated Canvas Recycled
Materials
No Preference
0
5
10
15
20
25
What materials do you prefer in a business casual shoe?
In total, 40% of males believed that the Nike swoosh symbol should not be visible.
5.0 Summary of Research Findings
As an organization, about research the possibility of presenting an extra
product offering of business casual footwear under the Nike brand name. From the
consequence of the examination information which find that at last, Nike could
effectively present another product offering. It was able to see that 71% of the sample
owned a business casual shoe.
Very
Satisfied
Somewhat
Satisfied
In different Somewhat
Dissatisfied
Very
Dissatisfied
Respondents 17 18 10 5 1
These numbers express an opportunity to introduce a business casual shoe that
men can be satisfied with. Just under 65% of the total participants within sample
claimed that they wear their business casual shoe everyday or once a week.
About 82% of sample chose style and comfort over color and price. In order to
successfully integrate a product such as this one, it must be stylish and comfortable to
wear. In addition, 74.2% of male participants said they would not like to see the Nike
logo visible outside of the shoe. Leather was the most popular of the choice materials
for this business casual shoe.
$75-$124 $125-$199 $200-$275
Respondents 49 18 2
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Most male consumers would only be interested in paying $75-$124 for a
business casual shoe from Nike. If they were to successfully introduce a product like
this one, price would play a large role in its success.
6.0 Athletic and Non-Athletic shop Market Summary
Global Footwear Market is growing at a steady pace since the past few years
and expected to garner $371.8 billion by 2020.Various types of footwear including
athletic and non-athletic shoes used by individuals of all age groups and gender as
below chart. Leather footwear are premium products occupying a significant market
share in the global market for footwear. Market players are also focusing on
expanding their sales channels through different web portals and its popularity among
teenagers and youths. Presently, manufacturers are focusing on developing and
innovating new products, to maintain their market positions as Adidas, Timberland
and ECCO, etc.….
Source from: AlliedMarketResearch,https://www.alliedmarketresearch.com/footwear-
market
7.0 Conclusions
First of all, it would be beneficial for Nike to expand their product line to
include a business casual shoe. Males ages 17-21 would be willing to pay $75-$124
for a comfortable leather rounded toe box shoe. The shoe should not feature the iconic
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