Reebok Final Project | Retail | Brand

Reebok Sports Shoes Consumer Behavior - Final Project Report

Submitted to: Prof. Prem Purwar Submitted by: Group 1, Section C Dev Karan Nehra – PGP25300 Prem Prakash Dalua – PGP25316 Suresh Sahoo- PGP25334 Sushant Sharma- PGP25335

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Contents
Executive Summary ............................................................................................................................................. 3 Objective .......................................................................................................................................................... 3 Context:............................................................................................................................................................ 3 Results & Recommendations ........................................................................................................................... 3 Introduction:........................................................................................................................................................ 4 Background ...................................................................................................................................................... 4 Market Overview.......................................................................................................................................... 4 Future Prospects .......................................................................................................................................... 5 Reebok Overview................................................................................................................................................. 6 Objective.............................................................................................................................................................. 7 Marketing Objective ........................................................................................................................................ 7 Research Objectives ......................................................................................................................................... 7 Consumer Behavior Objectives ........................................................................................................................ 7 Methodology ....................................................................................................................................................... 8 Secondary Research and Hypotheses .............................................................................................................. 8 Data Collection Methods ................................................................................................................................... 10 Data Analysis: .................................................................................................................................................... 11 Conclusions and Recommendations ................................................................................................................. 16 Limitations ......................................................................................................................................................... 17 Appendix ............................................................................................................................................................ 18 Sports Shoes Questionnaire........................................................................................................................... 18

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Still then it is most preferred by the High Income segment group whose income is generally greater than 5 lacs per annum. Reebok is highly perceived by the consumers as sports shoes so its association with the Sport utilities must be maintained. And Reebok is considered to be the best priced among sports shoes but it is perceived to be low on style compared to other sports shoes. While Friends are most influencing for one’s shoe purchase. Reebok is strongly positioned in terms of Brand quality and Price.Executive Summary Objective The objective of this consumer behavior project was to figure out how to increase the market share of Reebok in the Indian Market? Context: Reebok sports shoes and apparels is one of highly regarded brands in India. so it should continue to maintain this image by competitive pricing. cost effective. As of now it is the market leader. Hence. Retail outlets are preferred to shopping malls. discounts are highly preferred during purchase. Results & Recommendations The crux of the findings of the project showed that Comfort is the most important attribute one looks for while selecting a sports shoes. And also to identify on which of those attributes Reebok scores well and on which it is not so good. 3 . Reebok must concentrate its marketing efforts to change its image into a most stylish brand by co branding with fashion designers etc. but there are few other characteristics such as design & styling in which Reebok lags behind. more sales promotion activities should be run at retail outlets than in shopping malls. The perception of Reebok as a stylish shoe is low when compared to its competitors. brand image on which Reebok scores highly. The idea of this project is to understand which are attributes are most important for the consumer while buying a sports shoes product. Reebok is considered as the best priced in the market. closely followed by its parent company brand Adidas. There are several attributes like comfort.

4 .2% for the five-year period 2008-2013. representing a compound annual growth rate (CAGR) of 9. The wholly owned stores provide better margins to footwear makers and also helped them with their branding needs.558. 70%-80% of footwear units are still in the unorganized sector. sportswear and accessories retailers proved the most lucrative distributors for the Indian footwear market in 2008.7% since 2008. Recession had less impact on the Indian footwear market as the market was largely dependent on internal consumption that remained robust. International players especially preferred to go solo and open many new wholly owned distribution channels. Reebok is an American-inspired.2 million. In the same endeavor.295. equivalent to 92. Background Market Overview The Indian footwear market generated total revenues of $3. A lot of players announced plans to open their own retailing stores in 2008.4 million by the end of 2013 an increase of 62. which is expected to drive the market to a value of $5. footwear. generating total revenues of $3.791. Though the demand for footwear is fast growing in India. Clothing.7 million in 2008. apparel. and accessories.6% of the market's overall value. central government during the 10th Plan encouraged development of Footwear Complexes/Parks. to meet growing demand there is an urgent need to enhance the capabilities of organized segment units. fitness and women’s categories. is a producer of athletic footwear. Footwear industry was fragmented with many national and international players operating in a fast growing market but none having a substantial market share. a subsidiary of German sportswear giant Adidas. global brand that creates and markets sports and lifestyle products built upon a strong heritage and authenticity in sports.Introduction: Reebok International Limited. But the most popular distribution channels remained the multi branding stores and newly established retail malls. The Rise of organized retailing helped the footwear industry as well.3% for the period spanning 2004-2008. with an anticipated CAGR of 10. The brand is committed to designing products and marketing programs that reflect. Organised retailing chains helped the marketers to showcase their products properly and also target the premium segment customer who often visited these newly developed malls and multi brand retail stores. So. The performance of the market is forecast to accelerate.

5 . One of the biggest challenges for footwear in the forecast period is likely to be adaptability. Puma and Nike are likely to channel a part of their purchase and production from China to India. The growth in footwear industry in India will come due to increased incomes of urban young workers and professionals. Some of the leading footwear players like Adidas. The footwear market is also likely to benefit from the demand from rural and semi-urban India in the forecast period due to their economic empowerment.FOOTWEAR BRAND SHARES 2005-‘08 Future Prospects In the forecast period footwear is expected to outperform the growth witnessed in the previous review period. As the market grows so people will demand newer designs. growth in organized retailing and increased awareness of global fashion trends. better quality and increased distribution at shorter time cycles than before.

Reebok ended 2005 with total sales exceeding $91 million. Reebok reaches out to its target customers through its 500 exclusive Reebok Stores. ‘Aerobics’. The Company's brand vision is fulfilling potential. One aspect to Reebok's success has been its ubiquitous retail chain. all that the consumers wanted was an international brand of footwear and Reebok gave them that at an affordable price. ‘Tennis’. Adidas India’s sales revenues are about $22 million. It also retails from two thousand multi-brand outlets. to help customers make better purchase decisions. It offers different segments for both men and women like sports and fitness footwear. according to market sources. ‘Cricket’ and ‘Lifestyle’. In contrast. accessories. It plans to increase the store count from the existing 500 to over 600 before the next financial year. when the company came to India. 6 . 200 Shop in the shop outlets & 2500 dealer outlets. Reebok's main advantage has been that it understood the Indian consumer very well and has made an effort to grow alongside him. its mission – Always challenge and lead through creativity. Taking retail to new heights. the company was retailing from 182 franchised stores. By the end of 2005. Reebok’s new store offers the finest shopping ambience to customers with products displayed by categories such as ‘Running’. While its major competitors Adidas (as Brand) and Nike have not been as successful in the Indian market.Reebok Overview Reebok has dominated the Indian sportswear market. Reebok started its operations in India in 1995. fitness equipment and the lifestyle section. apparel. Sales in 2004 were $59 million. Reebok India commands a 51% market share in the premium sportswear industry. Reebok India has a pan-India presence with branch offices in Mumbai. Reebok’s positioning is to celebrate individuality in sports and life. Kolkata and Bangalore and ranks at the top amongst international footwear companies in India. ‘Walking’. For instance.

Our objective to suggest ways by which Reebok can increase it’s market share and maintain the No. To identify the impact of demographic and psychographic characteristics of customers on choice of sports shoes Consumer Behavior Objectives 1. being the market leader. style. product quality. Marketing Objective How to increase the market share of Reebok in the Indian sports shoes Market? Research Objectives 1. brand. To understand which factors are important for sports shoe buying behavior 2. To understand which attribute differentiates the No. To understand which brand attribute has the highest impact on the overall Brand attitude 2.Objective The objective of the project is to figure out ways increase the sales substantially of the Sports Shoes Brand Reebok (parent company – Adidas Group). apparel and equipment by sales (2009) after Nike.1 spot in Indian market. To find out which sports shoe brand is preferred the most by the consumer 3. But in Indian Sports shoes and apparels market – Reebok is the no-1 brand. To identify the major drivers behind choice of shoes for various needs demonstrated by the customer (price.1 brand(market leader) from the market challenger 7 . The Group is world's second largest maker of athletic footwear. store environment etc) 4. promotions.

University of Thai chamber of Commerce. 2. During in-depth interviews we found that youth segment is more inclined towards Reebok and preferences varied between men and women. according to the reference 1 mentioned above. Also. “Sports marketing strategy: A consumer behavior case analysis in China”. Blakemore. Customers buy shoes mostly on a seasonal basis. Multinational Business Review. The following have been studied in the process of obtaining reasonable hypotheses for the research. Consumer Behavior theories and prior researches that we have studied. psychographic profile of a consumer significantly affects his purchasing behavior. They are willing to spend more money for a better comfort product. working and non-working consumers. Lizhong. “Factors affecting Consumer‘s decision on buying shoes”. sex and income. buying intentions vary significantly with age. The following Hypotheses were developed keeping in view of the Research Objective: H1: Comfort is the most important attribute while purchasing sports shoes. H7: Reebok is perceived to be low on style compared to other sports shoe brands 8 . Spring 1996 Geng. according to consumer behavior theories such as Maslow’s. Based on our secondary research and in-depth interviews we found that the preferences. The most important attribute for them according the secondary research articles and the interviews is the comfort of the product. The in-depth interviews and the secondary research also point in the same direction. H6: Reebok is considered to be the best priced among sports shoes Reebok brand is associated with value for money among the different brands in the market. 1. Andrus. This perception is seen among the both users and non users.Methodology Secondary Research and Hypotheses Hypotheses have been derived with the in-depth interviews. Barbara. Ray. Chitpan Kanhasiri. Also. Income levels are one of the crucial factors which affect the purchase behavior of sports shoes.

the reference group attitude towards the product is very critical. H5: Replacing old shoes is the most important stimulus for shoe purchases From our secondary research and the in-depth interviews conducted we have found that most of the consumers shop for sports shoes on a periodic basis. Friends and peers are mostly consulted while making such decisions. H7: Sports shoe brands with discounts are highly preferred during purchase Sales promotions play an important role while making a sports shoe purchase as most consumers perceive them to be a value for money purchase during promotional campaigns H8: Friends are the most influencing source for sports shoe purchase Primary informal group is the most influential while making the purchase decision. H6: Consumers prefer Retail outlets to shopping malls while purchasing a sports shoes Consumers perceive that sports stores in malls don’t have a wide range of collection so they have a very little variety available for them. According to consumer behavior theory. We need to test that out. there is a general perception that Nike is the best Brand. but that does not seem to be true among Indian consumers. This shows that the main segment of consumers is upper middle class.One of the main inferences from the in-depth interviews is that consumers perceive that Reebok shoes are not that fashion conscious or up to the latest fashion even though they are very comfortable. Reebok and Adidas. Even in the secondary research done we have seen the same trend among the consumers of sports footwear. 9 . This hypothesis is to test whether this perception among the customers in true H4: Mean Brand Attitude of Reebok is highest among the brands in consideration Out of the major three brands – Nike. H9: High Income segment of (> 5 Lacs) prefer Reebok The main consumer for Reebok are affluent with their annual income more than 5 lakhs. They buy them once in a year or two years depending upon the usage. for a product which is visible and reflects the identity of the person. They believe that the retail outlets have a greater range and better service.

Sampling Frames: 1. And also focusing on people who may be wearing relatively newer shoes thus getting response from people who may have bought shoes in the recent past. Around 70 respondents from the Online Survey filled. the sampling frame would include :  Staff and family members in the campus  Graduates pursuing post graduation  People who may or may not have made a purchase decision in recent times  Age group of 20-45  Middle income to upper middle income backgrounds 2. The sampling frame will mainly include people visiting malls. 10 . Sampling Plan: Simple random sampling shall be used to collect data. Around 50 people will be from outside the campus. this will be within a set stratum of people.Data Collection Methods Sample Size As suggested by the objectives document the sample size will be kept in the range of 150. sampling frame will include following kinds of respondents:  People who have already identified a need and are going to make a purchase decision for a shoe in the near future or have made in the recent past  Age group . We will also include people who may have purchased shoes in the recent past to get an idea of post purchase behavior. 50 people will be from the campus. multi-brand shoe outlets. Our focus will be on getting response from people who are making or going to make a purchase decision for shoe by collecting samples from shoe outlets. Hence. Off campus: SRS in malls and markets. So. We shall include people who are going to make purchase decision regarding buying a shoe by visiting shoe shops.15 – 25 (20 people at least)* 26 – 40 (20 people at least)* 40 + (20 people at least)*  Middle income to higher income level *we shall try to include people who are going to make purchase decision regarding shoes by visiting shoe outlets (both single and multi-brand) 3. But. The people who On campus: SRS using the Roll number list of PGP1 and PGP2 (25 samples from each year).

07618 1.00 1.00 5. 11 .17552 1.6744 2.00 1.1860 2.00 5.8953 Std. our hypothesis is accepted. H2: Reebok is considered to be the best priced among sports shoes Data Technique Used: Descriptive Statistics SPSS Output Summary: Descriptive Statistics for Price Preference N Reebok price Nike price Adidas price Power price 172 172 172 172 Minimum Maximum Mean 1.00 3.00 1. Hence Hypothesis is accepted.9360 3. Deviation 1. Therefore.00 5.06997 1.Data Analysis: The survey data was analyzed to check the validity of the above hypotheses. H1: Comfort is the most important attribute while selecting sports shoes Data Analysis technique used: Descriptive statistics SPSS output summary: Interpretation: From the above descriptive statistics it can be inferred that comfort is the most important attribute one looks for while selecting a sports shoe.00 5. The analysis has lead to the following results.11899 Valid N (list wise) 172 Interpretation The Average Rating for the Reebok Price is high compared to the rest.

1453 3.90714 .00 2.00 3.00 Mean 3.00 5.98684 . 172 172 172 172 Minimum Maximum Mean 1.1325 4.00 5.00 1.00 5.00 2.00 1.81367 1.00 5. But it can be seen that Reebok is perceived as a close 3rd Position.00 Maximum 5.6627 4. the descriptive statistics on the respondents group shows that Nike’s brand image is perceived to be highest compared to other shoe brands as the mean is highest compared to other brands. Deviation .86979 .00 4.00 1. Deviation . This disproves our hypothesis that Reebok is perceived to be highest on overall Brand Attitude by consumers.5407 4. Hence Hypothesis is accepted H4: Mean Brand Attitude of Reebok is highest among the brands in consideration Data Analysis technique used: Descriptive statistics SPSS output summary: Descriptive Statistics N Reebok Nike Adidas Power Interpretation: As it can be seen from the output summary.00 5.93620 1.13090 Interpretation The Average Rating for the Reebok Style is low compared to the rest.1807 3.H3: Reebok is perceived to be low on Design (looks & styling) compared to other sports shoe brands Data Technique Used: Descriptive Statistics SPSS Output Summary: Descriptive Statistics N Reebok style Nike style Adidas style Power style Valid N (listwise) 172 172 172 172 172 Minimum 2.52445 .00 5.7965 3.7674 Std.6867 Std.00 5.03324 Valid N (list wise) 172 12 .

This proves our hypothesis that retail outlets are highly preferred to outlets at shopping malls. H6: Consumers prefer Retail outlets to shopping malls while purchasing a sports shoe Data Analysis Technique: Paired wise T-test SPSS Output summary: Inferences: From the above table. it obvious that replacement of old worn out shoes is the main reason for the purchase of shoes by consumers. 13 . Therefore. it can be inferred that there is significant difference between the inputs.H5: Replacing old shoes is the most important stimulus for shoe purchase Data Analysis technique used: Frequency test SPSS output summary: Interpretation: As it can be seen from the output summary. the computed mean of retail outlets is quite high compared to that of shopping malls. the frequency of option 1(shoe replacement) is very high compared to the other purposes. Also.

it can be inferred that friends have the highest mean and are the most influencing for one’s shoe purchase. it can be inferred that the discount rating is significantly different from 3. This proves our hypothesis. This proves our hypothesis that discounts are highly preferred during purchase.H7: Sports shoe brands with discounts are highly preferred during purchase Data Analysis Technique: Simple t-test SPSS output summary: Inferences: From the above table. and the obtained value of mean is greater than 3. H8: Friends are the most influencing source for sports shoe purchase Data Analysis technique used: Descriptive statistics SPSS output summary: Inferences: From the above descriptive statistics table. 14 .

15 . 5 lakhs income group dominates the buyer segment.H9: High Income segment of (> 5 Lac) prefer Reebok Data Analysis technique used: Frequency test SPSS output summary: Interpretation: As it can be seen from the output summary. This proves our hypothesis that high income segment are more likely to buy Reebok shoes. the income level 3 – that is above Rs.

This can be done by providing buyers comfortable trial facilities and good ambiance. Reebok must concentrate its marketing efforts to change its image into a most stylish brand by co branding with fashion designers etc. 16 . Retail outlets are preferred to shopping malls. Hence.Conclusions and Recommendations   Reebok is strongly positioned in terms of Brand quality and Price Reebok is most preferred by the High Income segment group whose income is generally greater than 5Lacs per annum   Promotions should be directed towards this segment of people with income greater than 5 Lacs. Reebok should leverage on this fact and come up with regular sales campaigns. so it should continue to maintain this image by competitive pricing  Reebok should make sure that the shoe buying experience in the retails shops in the malls should be good. Its association with the Sport utilities must be maintained by Reebok The perception of Reebok as a stylish shoe is low when compared to its competitors.  Reebok is considered as the best priced in the market. more sales promotion activities should be run at retail outlets than in shopping malls.    Reebok is highly perceived by the consumers as sports shoes.  Comfort being the most important criteria in buying shoes Reebok should differentiate itself based on comfort  Seasonal purchase behavior is seen among the consumers who also are highly motivated by promotional sales campaigns.

simple descriptive tests are used.Limitations   The Respondents collected are not heterogeneous. It’s self-administered by the respondents themselves. 17 .  The questionnaire is not surveyed personally by the researchers. Sophisticated statistical tests might reveal the results with most statistical significance.  For many of the data analysis cases. Hence results might be slightly biased The Random sampling technique is used in this project. Hence the results need not be most accurate. Other sampling techniques like Stratified sampling could have been better.

How important are the following attributes for selection of the sports shoes? Attribute Design (Looks & Styling) Comfort Durability Brand Name Availability Price Discounts “Recommendations of Friends” “Exclusive Brand Outlets” Not Important at all (1) 2 3 4 Highly Important (5) 2. How would you rate REEBOK for the following attributes? Attribute Design (Looks & Styling) Comfort Durability Brand Name Availability Price Discounts Poor (1) 2 3 4 Excellent(5) 18 .Appendix Sports Shoes Questionnaire 1.

How would you rate SPARX for the following attributes? Attribute Design (Looks & Styling) Comfort Durability Brand Name Poor (1) 2 3 4 Excellent (5) 19 .3. How would you rate ADIDAS for the following attributes? Attribute Design (Looks & Styling) Comfort Durability Brand Name Availability Price Discounts Poor (1) 2 3 4 Excellent(5) 5. How would you rate NIKE for the following attributes? Attribute Design (Looks & Styling) Comfort Durability Brand Name Availability Price Discounts Poor (1) 2 3 4 Excellent(5) 4.

Please rate the importance of the following information sources in your selection of a sports shoe brand for purchase. Not at All Very Important Important Family Friends/Peers Sales person Experts 1 1 1 1 2 2 2 2 3 3 3 3 4 4 4 4 5 5 5 5 20 . How would you rate POWER for the following attributes? Attribute Design (Looks & Styling) Comfort Durability Brand Name Availability Price Discounts Poor (1) 2 3 4 Excellent (5)  Rank the following Shoes Brands in terms of overall Brand preference to buy: Brand Name Ranking (most preferred to buy :1 and so on till 5) Reebok Nike Adidas Sparx Power 1.Availability Price Discounts 6.

How often you dine outside? Not at all Only in special occasions Once a month 2-3 times a month 4-5 times a month 21 . Which of the following is the most likely reason for you to purchase a new pair of sports shoes? Old ones worn out For exercise/gym New model Arrival Needed new shoes (Casual. b.) Others 5. Please rate your store preferences for purchasing sports shoes. How often you go for outdoor trips /excursions? Not at all Only in special occasions Once a week 2-3 times a month 4-5 times a month 6.Magazines Internet 1 1 2 2 3 3 4 4 5 5 2. How regular you are in going to the Gym or your Sports activity? (select One of the following) No Gyming / Sports at all Only in special occasions Once a week 2-3 times a week 4-5 times a week Everyday 4. Shopping malls Retail outlets 2 2 3 3 4 4 3. occasional wear etc. Not at All Preferred 1 1 Very Much Preferred 5 5 a.

Education: Undergraduate Graduation Post-graduation Technical 15. Employed 16. Occupation: Student Self-employed Govt. Over Rs 5 lac. Are you member of any social Group? Yes No 10. How often you go for movies in theatres? Not at all Only in special occasions Once a month 2-3 times a month 4-5 times a month 8. Female 22 . Age: Under 19 20 – 25 26 – 30 31 – 40 41 – 50 Above 50 13. Family Income: < Rs 2 lac. Rs 2 lac – Rs 5 lac.7. employed Pvt. Name: 12. If your peer group uses a particular product would you like using it? Yes No 9. Your sex: Male 14. Are you member of FaceBook / Orkut or others social community groups? Yes No 11.

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