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Business Research Methods

Term III End-Term Exam 2019-20

Time: 3 Hours
Total Marks: 100
Instructions:

 All the questions are compulsory.

 Keep your answers short and precise.
 Please return the question paper along with the answer sheet after completing this exam.

1. Read the following case and answer the related questions:

Nike is the largest seller of athletic footwear, athletic apparel, and other athletic gear in the world, with
about 25 percent market share worldwide. It focuses on NIKE Brand and Brand Jordan product
offerings in seven key categories: running, basketball, football, men’s training, women’s training, NIKE
sportswear, and action sports. The company sells its products through a mix of independent distributors,
licensees, and subsidiaries in approximately 120 countries worldwide. Nike has grown from an $8,000
company in 1963 to a company with revenues of $34.4 billion for the year ended May 31, 2017.

In 2016, Nike spent an enormous amount of money. Nike’s sponsorship and endorsement commitments
amounted to $6.2 billion in 2016, up 32% from 2015. In order to make sure that this money is being
spent properly, Nike relies on marketing research. It has shown a history of innovation and inspiration
in its marketing and is quick to adapt to the changing consumer and the world of sports. Nike has used
marketing research in understanding where future growth lies. A recent example is Nike’s shift from
marketing in the more traditional sports (basketball and running) to other sports (golf and soccer), where
it has not been as strong. Marketing research surveys revealed that the awareness of Nike among soccer
and golf players was low, and Nike decided to work on increasing these numbers. Nike has decided that
the money needed for licenses in its strong areas can be better spent in other areas where Nike does not
have brand awareness.

Today, the Nike Swoosh is recognized around the world. This is the result of more than 40 years of
work and innovation. It signed the first athletes to wear its shoes in 1973. Early on, Nike realized the
importance of associating athletes with its products. The partnerships help relate the excellence of the
athlete with the perception of the brand. Through focus groups and surveys, Nike discovered the
pyramid influence, which shows that the mass market can be influenced by the preferences of a small
group of top athletes. After it realized this effect, Nike began to spend millions on celebrity
endorsements. The association with the athlete also helps dimensionalize the company and what it
believes in. With Nike, this was, and remains, extremely important. It wants to convey a message that
the company’s goal is to bring innovation to every athlete in the world. Nike also uses athletes to design
new products by attempting to meet their individual goals. Explaining Nike’s strategy of celebrity
endorsements, Trevor Edwards, vice president of U.S. Brand Management, says that the sports figures,
such as Ronaldo, Michael Jordan, and Tiger Woods, who have endorsed Nike brands, all have
represented excellence in some way. Nevertheless, the athletes also have a personal side, such as their
drive to win or their ability to remain humble. All these qualities speak something about the Nike brand;
this not only benefits the brand but also helps to define what the Nike brand is and what it stands for.

The company also realized that in order to achieve its lofty growth goals, it must appeal to multiple
market segments. Based on marketing research, Nike divided the market into three different groups: the
ultimate athlete, the athletics participant, and the consumer who is influenced by sports culture. The
first segment is the professional athletes. The second constituency is the participants, those who
participate in sports and athletic activities but do not see themselves as athletes or as being part of the
larger sport. The third segment comprises those who influence others and are influenced by the world
of sports. These three different constituencies form three different consumer segments, and Nike uses
very different strategies for each.

Nike has always been an aggressive user of marketing research and this has been shown in its attack on
the European market. It decided to concentrate on different sports in order to reach European
consumers. Americans love baseball. And football. And basketball. But Europe’s favorite game is
soccer. Nike placed its focus on major sporting events (World Cups and Olympics) and
celebrity athletes that are relevant to the European consumer. Marketing research in the form of focus
groups and survey research revealed that the best positioning for Nike shoes was one that enhanced
performance in the sport. Through massive advertising campaigns, it has been able to change
the perception of its products from fashion to performance, and in the process increase sales
dramatically.
Another technique Nike has used is to specifically design a product line for a certain market. Nike uses
marketing research to determine the lifestyles and product usage characteristics of a particular market
segment and then designs products for that segment. An example is the Presto line, which was designed
for a certain youth lifestyle. Nike focused on the lifestyle and designed the products around this group.
It also used marketing research to determine the most effective media to communicate with the target
market.
Nike launched its “Write The Future” Campaign in 2010 that made extensive use of social media in
partnerships with YouTube, QQ.com, and Facebook. It celebrated football’s pivotal moments and
allows fans around the world to connect with their heroes. It featured an action-packed film that brought
together some of the world’s greatest players to inspire football lovers and sports fans around the world.
Footballers could then use this creative to build their own Facebook campaign and be eligible for
rewards.
Because of these methods, the Nike logo is recognized by 97 percent of U.S. citizens, and its sales have
soared as a result. However, Nike faces a new concern: that it has lost its traditional image of being a
smaller, innovative company. It also faces future obstacles in maintaining brand equity and brand
meaning. Continued reliance on marketing research will help Nike to meet these challenges, associate
its brand with top athletes and performance, and enhance its image.
Conclusion
Nike used marketing research to build its brand into one of the most well-known and easily recognized
brands in the world. Nike’s strategy of celebrity endorsements, its expansion into Europe, and the
resulting stronger association with soccer are some of the steps taken by Nike to grow its brand. In the
coming years, as Nike expands to newer markets and capitalizes newer opportunities, it will have to
continue its reliance on marketing research and continue to associate athletes, performance, and the
brand.
Case Related Questions:
a) Nike would like to increase its share of the athletic shoe market. Define the management-
decision problem (MDP). (1 marks)
b) Define an appropriate marketing research problem (MRP) and related research questions (RQs)
corresponding to the management-decision problem you have identified. (1+5 marks)
c) How can qualitative research be used to strengthen Nike’s image? Which qualitative research
technique(s) should be used, and why? (5 marks)
2. Consider the following table in which 300 respondents have been classified based on product use
and income. Does this table indicate the concomitant variation between product use and income?
Describe the relationship between product use and income, based on the table. (3 marks)

Product Use Income

High Medium Low
High 40 20 16
Medium 35 46 24
Low 25 34 60
TOTAL 100 100 100

3. List the steps involved in implementing the Pretest-Posttest Control Group Design. Also, Present the
design symbolically. (10 marks)
(a) How is the treatment effect measured in this Pretest-Posttest Control Group Design?
(b) Which extraneous variable is not controlled in this design? Why?

4. Welcome Inc. is a chain of fast-food restaurants located in major metropolitan areas in the South.
Sales have been growing very slowly for the last two years. Management has decided to add some
new items to the menu, but first, managers want to know more about their customers and their
preferences. (10 marks)
What kind of research design/s would you recommend? Why? Also, recommend various data-
collection technique/s to be used in the chosen design/s. Provide the rationale.
5. Rohtak Police wants to find out if the level of alcohol consumed by the driver impacts his braking
response time. The Police Superintendent suspects that ‘age of the driver’ and ‘mobile phone usage
during driving’ might also affect the braking response time. They hire you to reach conclusions
regarding the matter using experiments. (16 marks)
(a) Identify the dependent and independent variable/s for your experiment. Which Statistical Design
would you adopt for your investigation? And why?
(b) Graphically present all the main effects and interaction effects possible in this case. Make
hypothetical scenarios with the following levels:
Level of Alcohol Low, Medium, High
Age of the driver Young, Old
Mobile usage Yes, No

6. Identify the type of primary scale of measurement being used in each of the following cases. Please
give a rationale (in one sentence) for each case. (14 marks)
(a) I like to solve crossword puzzles
Disagree Agree
1 2 3 4 5

(b) How old are you?

(c) Please rank the following activities in terms of your preference by assigning ranks 1 (most
preferred) to 5 (least preferred).
i. Reading magazines
ii. Watching television
iii. Dating
iv. Shopping
v. Eating out
 (d) What is your Aadhar no.?

(e) On an average weekday, how much time do you spend doing your homework?
i. Less than 15 min
ii. 15 to 30 min
iii. 31 to 60 min
iv. 61 to 120 min
v. More than 120 min

(f) How much money did you spend last month on entertainment?

(g) The Richter scale measures the size of an earthquake. The scale is based on the amplitude in the
read out of a seismograph.
Richter Amplitude
1 10
2 100
3 1000

7. A manufacturer would like to survey users to determine the demand potential for a new power press.
The new press has a capacity of 500 tons and costs $225,000. It is used for forming products from
lightweight and heavyweight steel and can be used by automobile, construction equipment, and
major appliance manufacturers.
(a) Identify the population and sampling frame that could be used. (2 marks)
(b) Describe how a simple random sample can be drawn using the identified sampling frame.
(3 marks)
(c) Could a stratified sample be used? If so, how? (3 marks)
(d) Could a cluster sample be used? If so, how? (3 marks)
(e) Which sampling technique would you recommend? Why? (4 marks)

8. What do you mean by Reliability and Validity of scale? Explain with the help of true score model.
Also, explain the relationship between Reliability and Validity of scales in terms of errors in the true
score model?
(5+10+5 marks)