Case Study on Constant Change of Consumer Purchasing Behavior Nike

Question: Discuss about the Constant Change of Consumers Purchasing Behavior? Answer: Introduction The research illustrates the concept of the constant change of consumers purchasing behavior and its impact on the business of Nike Inc. Consumers buying behavior is the prime concern of any business in constructing marketing strategies and acquiring competitive advantages over the competitors (Bolton and Mattila 2015). The introduction chapter provides the basic knowledge of this particular research topic. Background of the company Figure 1: Logo of the company (Source: about.nike.com/ 2016) Nike Inc. is an well known multinational corporation of United States that are engaged in designing, developing, manufacturing, and marketing the of footwear, apparel, and accessories (about.nike.com/ 2016). As per the record of 2015, the net income of the organization was $3.273 billion (NASDAQ.com. 2016). It has been found that the net income, revenue, and profit margin has been declining since the third quarter of 2015 (NASDAQ.com. 2016). Rationale of the research. What is the issue? The main issue of this research is that presently the organization is facing some difficulties in generating more revenue as well as profit. The management body of the company fails to identify the expectations of its customers from their business. Thus, they fail to enhance their sales as well as revenue and profit. In 2012, revenue was increased from 20.89B to 24.12B and in the next year the growth was slowed down. In 2013, it was 25.33B and 27.79B in 2014 (NASDAQ.com. 2016). Nike failed to identify exactly which factors make constant change in customers purchasing behavior. The company confronts complex situation in retaining its customers and attract the new ones (Mahdi et al. 2015). In the present situation, they fail to meet the customers expectations and hence most of the customers break their loyalty with this brand and shift to consume other products. Why it is an issue? Presently, the company fails to identify the choices and expectations of its consumers and hence fails to provide customer satisfaction to the fullest extent. This is the reason that the organization fail to obtain comparative advantages over its major competitors (Mahdi et al. 2015). Why it is an issue now? In todays modern market, the consumers have more options in their hand to make the purchasing decision. It becomes more complicated to identify their preferences and predict their expectations as well. What could this study shed light on? This particular research study will help to analyze how the purchasing behavior of the consumers changes over time. Further, the study concentrates on the impact of the constant change of their choices on the business. Research Aim The aim of the research is to analyze various factors that affect the purchasing decision of the customers and the reason that the Nike business is facing certain issues due to the change of its customers choices. Research Objectives The objectives of this particular research are: To analyze different factors that influence the consumers buying decision To determine the impact of consumers purchasing behavior on the business of Nike Inc. Research Questions The research questions for this particular study are: What are the different factors that influence the consumers buying decision? What is the impact of consumers purchasing behavior on the business of Nike Inc.? Summary The introduction chapter creates the backbone of the current research that elaborates the entire research paper. The research rationale, aim and objective describe the requirements of the research. Further, the researcher has framed some research questions in order to proceed to the right direction. Literature Review Introduction The researcher conducts the study on the research topic of the impact of the constant change of consumers purchasing behavior on the business performances. For this research, the researcher has gathered the secondary data and information from various academic books, journals and relevant websites. Some previous research works have been done on the same topic that helps the researcher to gather knowledge and include additional viewpoints. Through analyzing the gap between the previous research works and the current research study, the researcher brings out the uniqueness of this paper. Importance of consumers behavior to the business Consumers purchasing behavior is the most important factor that the businesses considers before launching their products. The design of the products along the amount of supply is formulated by determining the purchasing behavior of the consumers (Zhang 2015). Different consumers have different minds and attitudes to the products available in the market. However, Ahmed, Parmar and Amin (2014) explained that most of the customers are influenced by the visual representation of the products. Thus, the organizations focus more on the advertising process to grab the attention of the buyers. Through promoting the products, the organizations analyze the response of the consumers and take further steps to enhance their sales. The prime purpose of identifying the customers choices and preferences is to deliver the highest possible satisfaction to the consumers. It is important for the business to understand the likes and dislikes of the customers to produce their products accordingly. More specifically, the organizations value the customers behavior in order to enhance their sales and business market. The large volume of customer satisfaction increases the number as well as amount of goods purchases. This way, the organizations enhance their business by valuing the consumers needs and attitudes as well. Influential factors of consumers purchasing behavior As opined by Thompson and Prendergast (2015), consumers purchasing behavior and their ultimate decision of selecting a product depends on some factors that influence them regarding their choices and preferences. In this context, Teng and Wang (2015) stated that the consumers make their purchasing decision as per their personal factors. The personal factors of the individuals vary in terms of differences in age, lifestyle, occupation and income of the consumers. The choice of a teenager in purchasing a product, say apparel, is different from the choice of an aged person. Moreover, people lead different lifestyles and thus their preferences also based on that. Solomon, Russell-Bennett and Previte (2012) added that the buyers are mostly influenced by their psychological factors where they make their decisions as per their beliefs and attitudes. Suppose a neighbor of a person has purchased a branded television, it will influence the person to buy the same one or something better than thi s. Here, the attitude of the person changes due to their beliefs about the available products (Javadi et al. 2012). Thompson and Prendergast (2015) added a different viewpoint where the cultural factors get highest importance in purchasing decision. The culture of the society where a person lives put highest impact on their needs and choices. For example, suppose the consumer lives in a culture where old aged people prefer sophisticated and simple dress and teenagers funky dresses with bright color. Suppose, the consumer's age is 36, thus he would start to shift to purchase more light dresses. Apart from this, the family needs and preferences also influence a persons buying decision (Teng and Wang 2015). If the family of a person likes to consume latest fashionable products, then the person also tend to buy the products as per the choices of his family. Gensler, Verhoef and Bhm (2012) stated the economic factor is the prime influential factor that influences the purchasing decision of the customers. If a persons income or the income of his family increases, then he would increase its consumptions. Apart from this, future income expectation also affected todays buying decision (Lin and Huang 2012). Impact of consumers changing behavior on business In todays modern technology world, people have more options to choose between. The firms confront more competition in both the domestic as well as the world market (Solomon 2014.). The organizations produce their products by analyzing its customers requirements and expectation from the organization. Here, the study has analyzed that Nike business fails to identify the expectations of the customers from their brand. Because of failing to recognize customers expectation, they fail to provide customer satisfaction. Thus, the sales have slowed down and as a result the company generates less revenue in the present situation (Mahdi et al. 2015). The factors discussed above influence the buying behavior and hence the choices and preferences of the consumers changes over times. Among the factors, the personal and psychological factors influence the consumers most in purchasing the products of Nike. Further, it has been found that the market position of its major competitors strengthens more and hence the respective organization is facing more challenges from the business market (Mahdi et al. 2015). Now, the consumers have more alternative products to shift to another brand and make purchase. This is the reason of constant changes in their purchasing decision. Gap analysis between current and previous research studies It has been found that most of the research works are done on how the consumers buying decision changes and how they affect the business and marketing strategies. The researcher experiences that the choices and preferences of the consumers changes constantly as well as rapidly in the present market. Therefore, the researcher has considered elaborating this in the present study with the help of the contemporary issues faced by Nike. Summary In this particular chapter, the researcher has analyzed the research topic along with the viewpoints of the researcher who have done research work on the same topic. Here, the researcher has elaborated the concept of consumers buying behavior and its influential factors. Apart from this, it is demonstrated how consumers changing decision of purchasing a product affect the business of Nike. At the end of the chapter, the researcher has analyzed a gap between the previous research studies and the current research work. This helps to understand the importance of doing this research study. Reference List about.nike.com/ 2016. [online] Available at: https://about.nike.com/ [Accessed 17 Mar. 2016]. Ahmed, R.R., Parmar, V. and Amin, M.A., 2014. Impact of product packaging on consumers buying behavior. European Journal of Scientific Research, 120 (2), pp.145-157. Bolton, L.E. and Mattila, A.S., 2015. How does corporate social responsibility affect consumer response to service failure in buyerseller relationships?.Journal of Retailing,91(1), pp.140-153. Gensler, S., Verhoef, P.C. and Bhm, M., 2012. Understanding consumers multichannel choices across the different stages of the buying process.Marketing Letters,23(4), pp.987-1003. Javadi, M.H.M., Dolatabadi, H.R., Nourbakhsh, M., Poursaeedi, A. and Asadollahi, A.R., 2012. An analysis of factors affecting on online shopping behavior of consumers.International Journal of Marketing Studies,4(5), p.81. Lin, P.C. and Huang, Y.H., 2012. The influence factors on choice behavior regarding green products based on the theory of consumption values.Journal of Cleaner Production,22(1), pp.11-18. Mahdi, H.A.A., Abbas, M., Mazar, T.I. and George, S., 2015. A Comparative Analysis of Strategies and Business Models of Nike, Inc. and Adidas Group with special reference to Competitive Advantage in the context of a Dynamic and Competitive Environment.International Journal of Business Management and Economic Research. NASDAQ.com. 2016. NKE Income Statement. [online] Available at: https://www.nasdaq.com/symbol/nke/financials?query=income-statement [Accessed 18 Mar. 2016]. Solomon, M., Russell-Bennett, R. and Previte, J., 2012.Consumer behaviour. Pearson Higher Education AU. Solomon, M.R., 2014.Consumer behavior: buying, having, and being. Engelwood Cliffs, NJ: Prentice Hall. Teng, C.C. and Wang, Y.M., 2015. Decisional factors driving organic food consumption: generation of consumer purchase intentions.British Food Journal,117(3), pp.1066-1081. Thompson, E.R. and Prendergast, G.P., 2015. The influence of trait affect and the five-factor personality model on impulse buying.Personality and Individual Differences,76, pp.216-221. Zhang, Y., 2015. The impact of brand image on consumer behavior: a literature review. Open Journal of Business and Management, 3, pp.58-62.