Customer based brand equity Nike

Akriti Jasuja,Kamal jain, Sonali arora,Nancy

(Student, Department of MBA,Maharaja agrasen institute of technology,Rohini)
Under the guidance of Ms.Nitika Sharma,Professor MAIT

Abstract
Purpose-This study aims to understand the strategies of customer
based brand equity of Nike. This article reports the findings of the
study conducted among 80 consumers that shows the customer based
brand equity of Nike. We are trying tounderstand to explore store
loyalty, customer attitude towards Nike. Knowledge, quality
perceptions and purchase intensions. In addition this study explores
the concept of customer based brand equity.

Methodology
This study summarizes the literature related to the customer based
brand equity, store loyalty, quality perception, purchase intentions to
analytically explore the concept of customer based brand equity. A
questionnaire was administrated empirically verify the hypothesis. Data
collected from customers was analyzed using regression

Findings
The consumer are very much aware of the brand. They
are loyal with the stores. Quality perceptions were very positive
among the customers. But consumers were also willing to
choose other brands if they are getting same quality product in
cheaper price than Nike. The conclusions drawn on the study are
useful to the retailers to understand the measures that affect the
store loyalty among consumers and will help them in improving
the strategies of customer based brand equity.

Originality
There are many research papers on customer based
brand equity. But the object that we are researching on is
customer based brand equity of Nike. We have done our
research on a particular brand that is Nike.

1|Page
1.Introduction
This report is all about evaluating the selected brand Nike based on its
strength and weaknesses with view to determine its effectiveness. This
report will mainly focus on customer based brand equity. In the later part of
the report methodology limitations results will be discussed.This article
reports the findings of the study conducted among 80 students that shows
the customer based equity of NIKE. The study considers customer's
attitude, loyalty knowledge, quality perceptions and purchase intentions.
Current research into topic indicates that NIKE'S marketing strategies help
keep them at the forefront of their industry of footwear and athletic apparel.
Nike succeeds in global marketing because they understand world markets
and how to reach each audience in a personalised approach that works for
different languages, cultures, customs, needs and differences.
Nike is the world's leading designer distributor and vendor of
athletic footwear, apparel equipments and accessories for a wide range of
sports and fitness activities. According to data monitor company mainly
operates in America, Europe, Middle East, Africa, Asia Pacific. The
headquarter of Nike is located in USA. Customer based brand equity
receives extensive attention in marketing literature. Customer based brand
equity is also known as Keller's brand equity model. Within the pyramid, the
model highlights four key levels that are used to create successful brand.
These four levels are :
1. Brand Identity
2. Brand meaning
3. Brand Response
4. Brand Relationships

However, two underlying dimensions brand awareness and brand image

emerge to measure the latent construct, customer based brand equity.
Evidently brands with high levels of ness and favourable and unique
association represent high equity brand
Definition of Customer Base Brand Equity
Customer based brand equity has been defined as the differential effect of
brand knowledge on consumer response to the market of the brand
(Kamakura and Russell, 1991). Thus brand equity is conceptualised from
the perspective of the individual consumer and customer based brand
equity occurs when the consumer is familiar with the brand and holds
some favourable, strong, and unique brand associations in the memory

2|Page
(Kamakura and Russell, 1991). Based on this definition, we believe that
there are five important considerations to defining brand equity. First, brand
equity refers to consumer perceptions rather than any objective indicators.
Second, brand equity refers to a global value associated with a brand.
Third, the global value associated with the brand stems from the brand
name and not only from physical aspects of the brand. Fourth, brand equity
is not absolute but relative to competition. Finally, brand equity positively
influences financial performance.In view of these characteristics, we
operationalise brand equity as the enhancement in the perceived utility and
desirability a brand name confers on a product. It is the consumers
perception of the overall superiority of a product carrying that brand name
when compared to other brands
.

1.1LITERATURE REVIEW
This paper reviews the definition of brand equity of nike by drawing
together strands from various literature and empirical studies made.This
paper consist of two parts.The first part reviews the literature on brand
equity and the second part develops our framework for brand equity,
focusing on customer based context that include dimensions of brand
equity of nike.

1.2 CUSTOMER BASED PERSPECTIVE

Brand equity is examined for two different perspectives:
Financial Perspective
Customer Based Perspective
The review is about the customer based perspective,is a perspective in
which the customer responses to a brand name .We focus on customer
based perspective for two reasons :
Customer based brand equity is the driving force for the increasing financial
gains of the nike firm.
To evaluate the brand equity of nike the managers does not have the
customer based measure we could discover only one attempt to measure
customer based brand equity.
Brand equity basically consists of consumer brand association that includes
Brand awareness, knowledge and image.Brand equity consists of two
components i.e.Brand strength and Brand value.The main interest is in
brand strength, which constitutes the brand association held by brand
customers.

3|Page
1.3 BRAND EQUITY AND BRAND EXTENSION
The managers are more into brand equity because of the brand loyalty and
brand extension.Brand equity has positive relationship with the brand
loyalty.Brand extension is the using the name of existing brand to introduce
the new product category.A current brand extension of nike has lower
advertising cost and higher sales because it is an existing product and the
customer already know about the product than the new product launched in
the market.
It has been found that the consumers accept brand extensions more when
the quality variations across the product line are small rather than large
which suggests that the consumers do not trust brand whose quality varies
and the brand managers think of not loosing brand equity by launching
substandard products.
Similarly brand extension are more acceptable for products where
customer based brand association are relevant like in our product nike, the
new product category is launched with the bedding in it.In order to extend
upon the nike empire, it propose the idea of exploring bedding .what makes
the bedding stand apart from other bedding in the market ,is their choice in
the fabric.

2.0 CUSTOMER BASED BRAND EQUITY

Customer based brand equity has been defined as the differential effect of
brand knowledge on consumer response to the marketing of the
brand.Thus brand equity is conceptualized from the perspective of the
individual consumers and customer based brand equity occurs when the
consumer is familiar with the brand and hold some favorable, strong and
unique brand association in the memory.

2.1 DIMENSIONS OF BRAND EQUITY

There are five dimensions of brand equity which is the framework for
measuring customer based brand, the brand equity of nike is based on
these dimensions which helps in the success of the brand-

 Perceived Quality
 Perceived value
 image
 Trustworthiness
 Commitment

4|Page
2.2 CONSUMER VALUE TRUSTWORTHINESS
Trustworthiness is included because consumer place high value in the
brand the trust.As we are researching on nike ,the consumer pays the high
value because of the test on this highly demanded brand on which the
consumer can trust upon.Trust can only build by the good quality the brand
is offering.

ABOUT NIKE
Nike is the incorporated company that operates in footwear company,
which is liked by the consumer because of its quality and comfort.Nike
believes that the quality and comfort are the most important thing for the
sports person. The mission of nike is that by adopting the business
practices it is committed of securing quality, restore of the environment and
the increasing value of customers, shareholders and business partners.
This report is all about to show that the brand nike is accepted largely by
the consumer or not.If accepted what are the reviews about the brand that
they are likely to purchase it again or not.people are likely to buy the
product if the like the quality and comfort even if the prices are high which
is reviewed by the questionnaire made with the responses of what they
really think about the product and whether they are satisfied with the brand
or not.Further the attitude of the consumers is studied in the research
methodology.

3. Methodology
3.1.Measures- Following measures are used for this study:-
(A)Customer based brand equity
Each of the seven items are measured on a five point scale that
will tell us that how it the current consumer based brand equity of
nike. Chronbash’s alpha of this instrument is
(B) Consumer attitudes
The judge the attitude of consumers towards this particular brand
we have divided it in four items, each measured with five-point
scales. The items come from Maheswaran and Sternthal (1990).
It was very important to find out about what people thinks about
this brand before we even start to think about its further

5|Page
expansion.
(c)Product quality perception
Each of the four items are measured on a five-point scale, assess
product quality perceptions. Perceived quality can be defined as
the customer’s perception of the overall quality or superiority of a
product or service with respect to its intended purpose, relative to
alternatives.

(D)Purchase intentions
To measure this variable, the study uses three items, each
measured on a five-point semantic differential scale, derived from
existing literature on purchase intentions (Baker & Churchill,
1977; Kilbourne, 1986).

3.2 Data collection and survey method-

The quantitative study was done to test the relationship between
customer based brand equity, customers attitude, quality
perceptions and their purchase intention of the brand NIKE. It was
done to test that whether it has a positive or negative relationship
with each other. This survey was done on 80 people to judge the
outcome from their answer.

4. Results
Regression analysis was carried to test the hypotheses. General
assumptions of the multiple regressions were taken into consideration. The
independent variables are customer based brand equity, customers attitude
and quality perception whereas the dependent variable is the customer
purchase intentions.

6|Page
 Coefficient Standar P-
variables s d Error t Stat value
2.380 0.019
Intercept 0.819287 0.34411 8 7
0.268 0.789
Cbbe 0.026928 0.10028 5 0
0.661 0.510
Attitude 0.098413 0.1488 3 3
Perceptio 4.156 8.4E0
n 0.633424 0.15240 3 5

This above table shows the results of the regression when run
combined on all the three independent variables and the
dependent variable which is denoted as the intercept. In this we
are able to find that when the regression test is run
simultaneously the CBBE and Attitude are the ones which have
their direct impact on the purchase value because of the fact that
they have their p value more than 0.5 since we are aiming at 95%
level. The table below will show that how will each of the table will
have an individual impact on the intercept

variable Coefficients Standard Error t Stat P-value

Intercept 1.98349 0.357304 5.551265 3.77E-07
cbbe 0.435735 0.090915 4.79278 7.71E-06

The above table shows that how there is no significant impact on

the on the intercept of cbbe when taken individually since the p
value is very much smaller than 0.5

Standard
Coefficients Error t Stat P-value
Intercept 1.282 0.350479 3.657855 0.00046
1.11E-
attitude 0.612637 0.088515 6.921318 09

7|Page
Again we can observe that individually there is no impact of the
attitude on the intercept that is purchase intent

5. Discussions and implications-

The intense competition in the dynamic marketplace and high
cost of investments involved in entering new markets have forced
companies to adopt innovative brand strategies such as brand
extension and co-branding (Desai & Keller, 2002). The literature
of my paper has discussed so far the branding strategy as an
important marketing technique for Nike brand. Any of the high end
brand like Nike is try to extend their market share by finding about
the brand equity than This must be done with a wider scope as
this brand is an international brand as well. These decisions either
dilute the consumers' quality perceptions and attitude towards the
high reputable brand, or offers several advantages. First, a high-
equity brand because of its significance in the market may
demand more profit premiums from a low-equity partner if they
choose for co branding. Moreover a well-known brand like nike
has more power in negotiation, from a low-equity brand flow.
Obviously, according to the findings, companies will not benefit
from co-branding strategy in terms of consumers' evaluations of a
product in the short-run. For Building positive brand attitudes and
favorable quality perceptions requires time and effort. If a
company is seeking a quick boost in sales or improved
consumers' perceptions of a product by making an alliance with
another brand, this research does not suggest any significant
outcome for this particular decision.

8|Page
6.Limitations and scope
One of the major and important limitations of this study is the very
small sample size of 80 random people and sampling
technique which may have affected the generalizability of our
results. Moreover, sample is collected from Delhi and NCR only.
To have some better results, any researcher may extend their
sample to other metro cities of India. Further, in our study we are
more concerned about studying the atitude and peception of
people towards our object brand Nike changes from time to time
and mood to mood depending upon different circumstances
people are within. For further researches we might think about
taking brands with some less brand value so that we can also find
that how big brands and comparatively low image brands have
same type of behaviour or not. Only some of the few
psychographic characteristics like attitude etc have been
examined. For further research, researchers can even plan to
research using demographic variable which can lead to how
different age group or income group or for example gender.
Basically the final conclusion would be that it wont justify to judge
an entire object on the basis of a survey from a restricted sample
size.

9|Page
References

Aaker, D. A., & Keller, K. L. (1990). Consumer evaluations of brand

extensions. Journal of Marketing, 54(1), 27−41.

Abratt, R., & Motlana, P. (2002). Managing co-branding strategies: Global

brands into local markets.

Business Horizons, 45(5), 43−50. ACNielsen (1999). New product

introduction-successful innovation/failure

International Journal of Research in Marketing, 13(4), 365−377. Cobb-

Walgren, C. J., Ruble, C. A., & Donthu, N. (1995). Brand equity, brand
preference, and purchase intent.

Journal of Advertising, 24(3), 25−40. d'Astous, A., Colbert, F., & Fournier,
M. (2007). An experimental investigation of the use of brand extension and
co-branding strategies in the arts.

Journal of Services Marketing, 21(4), 231−240. Desai, K. K., & Keller, K. L.

(2002). The effects of ingredient branding strategies on host brand
extendibility.

How co-branding versus brand extensions drive consumers' evaluations of

new products: A brand equity approach Ali Besharat ⁎ University of South
Florida, College of Business Administration, Department of Marketing, 4202
E. Fowler Avenue, BSN 3403, Tampa, FL 33620-5500, USA

10 | P a g e