Thanks to visit codestin.com
Credit goes to www.scribd.com

0% found this document useful (0 votes)
15 views17 pages

LO3

This document outlines a strategic marketing plan for Nike that leverages consumer behavior analysis to enhance customer satisfaction and build brand loyalty. It emphasizes understanding consumer preferences, buying motivations, and the distinction between customers and consumers, while also proposing elements such as segmentation, enhancing customer experience, leveraging data analytics, building community, and prioritizing sustainability. Additionally, it addresses cognitive biases in pricing and marketing strategies, recommending policies for unbiased algorithms and equitable data representation.

Uploaded by

Thembela Nokela
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
0% found this document useful (0 votes)
15 views17 pages

LO3

This document outlines a strategic marketing plan for Nike that leverages consumer behavior analysis to enhance customer satisfaction and build brand loyalty. It emphasizes understanding consumer preferences, buying motivations, and the distinction between customers and consumers, while also proposing elements such as segmentation, enhancing customer experience, leveraging data analytics, building community, and prioritizing sustainability. Additionally, it addresses cognitive biases in pricing and marketing strategies, recommending policies for unbiased algorithms and equitable data representation.

Uploaded by

Thembela Nokela
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 17

1.

LO3: 1

Developing and Executing a Strategic Marketing Plan for Nike: Leveraging


Consumer Behaviour to Maximise Customer Satisfaction and Build Brand
Loyalty

In today's fiercely competitive marketplace, understanding consumer behaviour is


paramount for success, especially for a globally recognised online retailer such as
Nike. This paper aims to outline a strategic marketing plan that employs consumer
behaviour analysis to enhance customer satisfaction and cultivate brand loyalty. By
focusing on key aspects such as customer preferences, buying motivations, the
distinction between customers and consumers, and integrating these insights into a
cohesive strategy, Nike can better position itself to meet the evolving needs of its
customers.

1.1 Understanding Consumer Behaviour

To start with, grasping the nuances of consumer behaviour is essential. Consumer


behaviour refers to the process’s individuals go through when making purchase
decisions, encompassing emotional and psychological factors that influence choices.
For Nike, this means identifying not only what consumers buy but why they buy it. An
analysis of consumer behaviour provides valuable insights into the motivations that
drive purchasing decisions and can guide Nike in tailoring its marketing strategies
effectively.

1.2 Customer Preferences

Customer preferences are one of the key aspects to consider in the marketing plan.
Nike’s primary audience consists of athletes and fitness enthusiasts who typically
prefer high-quality performance products. Through surveys, social media
engagement, and market research, Nike can gather data on preferred styles,
materials, and functional features of athletic clothing and footwear. In particular, the
rise of athleisure has highlighted consumer preferences for versatile apparel that
transitions seamlessly from workout to casual settings (Sweeney, 2020).

By leveraging these insights, Nike could enhance its customisation options, allowing
customers to create personalised products. The Nike By You platform, which offers
customisation of shoes, exemplifies this approach. A strategic marketing plan could
expand this model to include apparel, emphasising the unique ability of consumers
to express themselves through their athletic wear. Moreover, maintaining an active
dialogue with consumers via social media can help Nike adjust its product offerings
in real time based on shifting preferences, key trends, and emerging styles.

1.3 Buying Motivations

An understanding of buying motivations is another critical component. Purchasing


decisions are often influenced by intrinsic and extrinsic motivations. For Nike’s target
demographic, intrinsic motivations might include the desire for personal growth,
fitness goals, and self-expression, while extrinsic factors could encompass social
approval, promotional deals, and brand perception.

To tap into intrinsic motivations, Nike can enhance its marketing messaging to focus
on personal stories of athletes from diverse backgrounds who have overcome
challenges with the help of Nike products. This concept creates an emotional
connection and encourages engagement. Additionally, leveraging the “Just Do It”
tagline can inspire consumers to pursue their goals, thereby reinforcing their brand
association with empowerment and accomplishment (Kotler & Keller, 2016). Extrinsic
motivators can be effectively employed within promotional campaigns. Limited-time
offers, seasonal discounts, and partnerships with fitness influencers can create
urgency in purchasing decisions. By understanding the buying motivations within its
market, Nike can structure its pricing strategies and promotional campaigns to better
align with what drives consumer behaviour.

1.4 Distinction Between Customers and Consumers

In the context of retail, it’s essential to differentiate between customers and


consumers. Customers refer to the individuals who engage with the retail brand,
frequently making purchases, while consumers are the ultimate users of the product.
In many cases, particularly in the case of Nike, the customers who purchase the
products may differ from the intended consumers, especially in scenarios involving
children or gifts.

Understanding this distinction can influence Nike’s approach to marketing. For


instance, highlighting the benefits of Nike products for children can persuade parents
(customers) to spend more on high-quality athletic wear for their kids (consumers).
Additionally, Nike should recognise the role that parents, friends, and peers play in
influencing purchasing decisions and can tailor its messaging to appeal to these
customer segments. Marketing campaigns that showcase the communal aspects of
fitness—group classes, family fitness challenges—can create a broader appeal,
thereby attracting a wider audience.

1.5 Strategic Marketing Plan Elements

1.5.1 Segmentation, Targeting, and Positioning (STP)

An effective STP strategy is vital for Nike. The company should segment its market
based on demographics, psychographics, and behavioural attributes. Target
segments could include youth athletes, fitness-minded individuals, and casual
wearers—all unified by an affinity for Nike products. Nike’s existing brand positioning
as a premium athletic wear manufacturer should continue to emphasise quality,
performance, and innovation.

With a focus on performance-driven technology in footwear and apparel, Nike can


cater to serious athletes while also promoting its lifestyle products for casual
consumers. This dual approach not only maximises market penetration but also
builds brand credibility across varied customer bases.

1.5.2 Enhancing Customer Experience

To maximise customer satisfaction, Nike must refine customer interaction points.


This encompasses everything from the online shopping experience to post-purchase
engagement. The Nike website and app should prioritise user-friendly navigation,
personalised product recommendations, and streamlined checkout processes.

Nike can integrate augmented reality features into its app, enabling customers to
visualise how products would look on them or how they fit into their existing
wardrobes. By facilitating a seamless customer journey, Nike can foster greater
satisfaction and encourage repeat purchases.

1.5.3 Leveraging Data Analytics

Data analytics allows Nike to remain responsive to market trends and changing
consumer preferences. The company should utilise big data to track customer
interactions and preferences, collecting insights from both online and offline
channels. This information can inform product development, marketing initiatives,
and customer service enhancements.

Real-time analytics can also support predictive modelling, helping Nike anticipate
customer needs and preferences. By analysing past purchasing behaviour, Nike can
tailor marketing campaigns that resonate with individual customers, thus enhancing
customer satisfaction and building brand loyalty.

1.5.4 Building a Community

Creating a community around the Nike brand can significantly enhance brand loyalty.
Nike can establish platforms for customers to share their fitness journeys, provide
testimonials, and engage with one another. This can be achieved through hosting
local events, developing a robust social media presence, and creating forums where
customers can interact.

Engaging customers in community-oriented activities not only deepens their


emotional connection to the brand but also fosters a sense of belonging. By
promoting group challenges, sponsorships of community sports events, and digital
fitness challenges, Nike can cultivate loyalty among its customers while promoting its
products organically.

1.5.5 Sustainability Initiatives

Finally, prioritising sustainability can resonate deeply with today's environmentally


conscious consumers. Nike should enhance its sustainability initiatives, promoting
environmentally friendly practices in sourcing materials and manufacturing
processes. Marketing campaigns praising these green initiatives can attract
consumers concerned with purchasing from socially responsible brands.

Incorporating transparency about sustainability efforts into brand messaging will not
only improve customer satisfaction but also build brand loyalty among
environmentally-minded consumers. Effective communication regarding Nike's
efforts in reducing its carbon footprint, ethically sourcing materials, and supporting
local communities can instil a sense of pride in the brand among consumers.
In conclusion, a well-developed strategic marketing plan that utilises consumer
behaviour analysis can significantly enhance customer satisfaction and build brand
loyalty for Nike. By focusing on key aspects such as customer preferences, buying
motivations, and the nuances between customers and consumers, Nike can tailor its
approach to better meet the needs of its diverse audience. Integrating data analytics
and community engagement while emphasising sustainability further solidifies Nike’s
positioning as a leader in the online retail space. As Nike continues to evolve its
strategic marketing efforts, the integration of consumer behaviour insights will be
paramount in ensuring its ability to resonate with current and future generations of
consumers.

2. LO3: 2

A Framework for Analysis at Nike

Consumer behaviour is an intricate area of study that encompasses the various


factors influencing an individual’s buying decisions. Comprehending these factors is
paramount for businesses, especially in the context of large online retailers such as
Nike. This section formulates a detailed framework identifying five critical factors -
psychological, social, cultural, personal, and economic influences. By applying this
framework to analyse Nike's consumer behaviour, the objective is to enhance
understanding and optimise product offerings and marketing strategies.

2.1 Psychological Influences

Psychological factors significantly impact consumer behaviour. Key elements within


this category include motivation, perception, learning, beliefs, and attitudes.
Motivation is the driving force that compels consumers to act in a certain way.
According to Maslow's hierarchy of needs, consumers are motivated by a range of
needs, from physiological to self-actualisation. In Nike's case, the brand effectively
taps into the "esteem needs" and "self-actualisation needs" by promoting products
that enhance athletic performance and foster a sense of identity and achievement
(Maslow, 1943).

Perception relates to how consumers interpret information about products. With


Nike’s strong brand presence and marketing campaigns focusing on innovation and
performance, the perception of its products as high quality and desirable is well
established (Keller, 2013). The emotional branding approach adopted by Nike
communicates a powerful image that resonates with consumers’ aspirations, further
solidifying brand loyalty. Moreover, consumers learn from previous experiences and
information obtained from others, influencing their future buying behaviour. Nike
continuously engages in educational marketing efforts, emphasising the benefits and
innovations of its products, resulting in increased knowledge and positive
associations, thereby enhancing purchase likelihood (Schiffman & Kanuk, 2010).

2.2 Social Influences

Social influences encompass the impact of family, friends, and social media on
consumer decisions. For major brands like Nike, the relevance of social circles and
reference groups cannot be underestimated. Family and friends often serve as
primary influencers, particularly for younger consumers. If peers endorse Nike
products, it raises the likelihood of purchase amongst their social networks (Brown &
Reingen, 1987).

Furthermore, social media has transformed the landscape of how brands interact
with consumers. Nike effectively utilises platforms like Instagram and Twitter for
marketing and community engagement. The brand's ambassador programs featuring
athletes and influencers contribute to brand appeal through their perceived expertise
and authority. According to studies on social proof, the visibility of endorsements
from respected figures and peers can lead to a higher likelihood of purchase
decisions among consumers (Cialdini, 2007). Nike’s engagement strategies through
user-generated content also illustrate the importance of social influence. By
encouraging customers to share their experiences and achievements while using
Nike products, the company creates a sense of community around the brand, further
enhancing consumer connection and loyalty.

2.3 Cultural Influences

Cultural factors play a crucial role in shaping consumer behaviour. Culture


encompasses a set of beliefs, values, and norms shared by a group. Nike actively
engages with diverse cultural narratives in its marketing strategies, appealing to a
global audience while acknowledging local customs and values. For instance, Nike
has launched campaigns that celebrate cultural identity, such as its advertisements
around significant events like the Olympics, which promote inclusivity and diversity
(Holt, 2002).

Subcultures, which refer to groups with distinct cultural characteristics, are also
significant in influencing consumer decisions. Nike’s specialisation in various sports
and demographic segments—such as women’s sportswear and casual lifestyle
products—demonstrates its strategy of catering to specific subcultures within the
broader sports culture. This targeted marketing resonates with consumers' identities
and values, strengthening brand loyalty (McCracken, 1986). Brand associations
grounded in cultural significance further impact purchase decisions. The Swoosh
logo and the ethos behind brand campaigns like "Just Do It" evoke sentiments of
empowerment and perseverance across different cultures, fostering a profound
emotional connection with consumers.

2.4 Personal Influences

Personal factors include demographics, lifestyle, and individual preferences.


Demographics such as age, gender, income, and education level significantly
influence purchasing behaviour. Nike's market analysis identifies various consumer
segments and tailors product offerings based on these demographics. For instance,
the growing trend of athleisure wear reflects a shift in lifestyle choices, prompting
Nike to expand its product lines that cater to consumers wishing to blend comfort
with style (Bardhi & Eckhardt, 2017).

Lifestyle choices, attitudes toward health and fitness, and recreational pursuits also
shape consumer behaviour. Nike has positioned itself not just as a sporting goods
company but as a lifestyle brand, appealing to consumers who prioritise wellness
and activity. Through its Fit app and community events, Nike fosters a lifestyle brand
narrative, encouraging consumers to integrate physical activity into their daily
routines (Rosenbaum, 2009). Furthermore, personal preferences regarding
sustainability and ethical consumption are increasingly becoming influential in
consumer decisions. Nike's commitment to sustainability through initiatives like
“Move to Zero” resonates with environmentally conscious consumers, aligning their
purchasing decisions with personal values.

2.5 Economic Influences


Economic factors constitute a vital consideration in consumer behaviour, particularly
for large online retailers like Nike. Consumer sentiment fluctuates with the economic
climate, affecting disposable income and, consequently, purchasing power. In
periods of economic downturn, consumers may prioritise essential purchases over
luxury items, potentially impacting sales for brands positioned at higher price points
(Kotler & Keller, 2016). Moreover, understanding the economic circumstances of
different consumer segments allows Nike to effectively strategize pricing,
promotions, and product offerings. For instance, during economic hardship, offering
promotional discounts or special financing plans for high-end products could
enhance consumer reach. Nike’s membership programs provide exclusive discounts
and early access to new products, tapping into consumer demand for value without
compromising brand prestige.

In summary, a multifaceted framework that considers psychological, social, cultural,


personal, and economic influences offers a comprehensive approach to
understanding consumer decisions. Nike, as a leading online retailer, exemplifies
how these factors intertwine to affect consumer behaviour. By acknowledging and
responding to these influences, Nike can optimise its product offerings and
marketing strategies, ensuring it meets the evolving needs and preferences of its
target audience. As consumer landscapes continue to change, brands like Nike must
remain agile and responsive to maintain relevance and competitive advantage in the
market.

3. LO3: 5

Policies to Prevent and Mitigate Pricing Biases and Loss Aversion at Nike

In the rapidly evolving world of e-commerce, large retailers such as Nike face the
challenge of addressing not only market competition but also the subtler nuances of
consumer behaviour influenced by various cognitive biases. Cognitive biases, as
discussed by Taylor (2013), can lead to irrational decision-making processes, which
are detrimental both to consumers and to the businesses themselves. As Nike
continues to innovate in its product offerings and marketing strategies, it must
formulate comprehensive policies targeting the specific biases outlined in Taylor's
work, particularly as they relate to consumer purchasing decisions. This section
proposes a policy framework that includes implementing unbiased algorithmic
protocols, ensuring equitable data representation, conducting frequent bias audits,
establishing clear pricing transparency, and designing marketing strategies to
counteract loss aversion tendencies.

3.1 Unbiased Algorithmic Protocols

One of the most pressing issues in online retail today is the use of algorithmic pricing
and recommendations, which can inadvertently promote biases. Policy
recommendations for Nike concerning algorithmic protocols should emphasise the
need for unbiased algorithms that optimise not only for sales but also for equitable
representation of products across diverse consumer demographics. To implement
this, Nike could leverage artificial intelligence (AI) and machine learning algorithms
trained on diverse data sets that accurately reflect the varied preferences of its
global consumer base. By ensuring that the data used to train these algorithms
includes insights from diverse ethnicities, genders, and economic backgrounds, Nike
can reduce the risk of confirmation bias—where algorithms only reinforce existing
consumer preferences—thereby creating a more inclusive shopping experience
(Huang, Boulton & So, 2020).

Furthermore, it is essential for Nike to establish clear metrics for evaluating biases
within these algorithms on a regular basis. This will prevent knee-jerk decisions
based solely on quick analytical snapshots while promoting long-term, strategic
decision-making that takes time to develop. Sage-like deliberation processes would
replace intuitive decision-making bolstered by robust data analysis that includes
diverse perspectives (Taylor, 2013).

3.2 Equitable Data Representation

Equitable data representation is crucial in constructing models that do not favour


specific consumer groups while neglecting others. Nike's marketing and product
development teams should ensure that their data collection methods capture a wide
range of consumer experiences and preferences. By incorporating feedback from
marginalised demographic groups, Nike can overcome information biases, such as
the silo effect, that might arise when limited viewpoints dominate product design and
marketing strategies.
In terms of policy, Nike could establish a council of consumer representatives that
explicitly includes voices from underrepresented groups to guide product
development and marketing strategies. This initiative would not only foster
community engagement but also ensure that all consumers see themselves reflected
in Nike’s offerings, combating the inertia and myopia biases that could otherwise
hinder inclusivity and innovation (Smith & Lewis, 2021).

Additionally, Nike can actively engage in social responsibility initiatives that aim to
uplift underserved communities, which could provide crucial insights into these
groups’ preferences and buying habits. Acting on research and data with diverse
consumer input can help Nike avoid assumptions that can arise from personal
experiences, reducing the risk associated with myopia bias.

3.3 Frequent Bias Audits

To maintain accountability in addressing cognitive biases, Nike should implement


frequent bias audits as a fundamental component of its policy framework. These
audits would examine both data-driven algorithms and human decision-making
processes to assess their fairness and inclusivity. Regular assessments can help
identify areas where biases infiltrate the consumer experience, enabling Nike to
correct them proactively. These audits should involve a multidisciplinary team that
includes psychologists, data analysts, and marketing experts. By employing experts
from various fields, Nike can ensure a holistic approach to bias detection and
resolution, ultimately refining its practices to avoid alarmist or overly optimistic biases
that may misguide market strategy (Kahneman, 2011).

Furthermore, transparency about audit results should be encouraged. By publishing


findings and subsequent actions taken, Nike can engage sincerely with its consumer
base, fostering trust and demonstrating a commitment to equitable practices. This
transparency also allows the community to provide feedback, ensuring continued
evolution and refinement of practices aimed at bias mitigation.

3.4 Establishing Clear Pricing Transparency

Pricing biases, particularly loss aversion, can significantly impact purchasing


decisions. Consumers often struggle with the prospect of losing out on perceived
savings or dealing with the costs associated with trying new products. To mitigate
these biases, Nike should prioritise pricing transparency in its online retail channels.
One concrete policy could involve clear display of Product Pricing Evolution (PPE)
analytics, allowing consumers to see historical pricing data for products easily. This
feature could help moderate the overconfidence effect; consumers may often
assume a product's price will only increase, making them more likely to buy
impulsively for fear of losing a good deal (Thaler & Sunstein, 2008).

Nike might also consider adopting a “price matching” policy, which would further
obliterate the anxiety associated with loss aversion. By reassuring consumers that
they will receive the best price for a product, Nike can foster a trusting relationship
with customers. Thus, shoppers won’t second-guess their purchases based on past
price experience, therefore diminishing their fear of loss and promoting satisfaction in
their decisions.

3.5 Designing Marketing Strategies to Counteract Loss Aversion

To counteract loss aversion tendencies in consumers, Nike can design marketing


strategies explicitly aimed at reframing how consumers perceive value. This could
involve framing product benefits in terms of potential gains rather than losses. For
example, marketing campaigns could focus on celebrating lifestyle improvements
tied to Nike products—such as increased fitness or social engagements—rather than
emphasising the costs or risks of not purchasing. Additionally, Nike could create
experiential campaigns, allowing consumers to engage with products without
immediate financial commitment. Free trials, pop-up experiences, or rental options
for high-ticket items could mitigate inertia bias, allowing consumers to break away
from familiar purchase patterns and fill the void left by habitual overthinking and
stagnant decision-making (Cialdini, 2009). Moreover, incorporating social proof in
advertising—featuring testimonials or showcasing community involvement with
product use—can also diminish loss aversion. The emphasis on community
engagement can assure consumers that their investment aligns with a greater social
good, further encouraging them to move past perceived losses towards a mindset
that embraces gain-oriented thinking.

In conclusion, by addressing the biases outlined by Taylor (2013) through a


structured and comprehensive policy framework, Nike can foster a more equitable
and engaging shopping experience for its diverse consumer base. From
implementing unbiased algorithmic protocols and ensuring equitable data
representation to conducting frequent bias audits and enhancing pricing
transparency, Nike has the opportunity to set industry standards that mitigate
cognitive biases effectively.

Moreover, designing marketing strategies that counter loss aversion while promoting
gains can create a more dynamic engagement that resonates with consumers on a
deeper level. These policies not only align with Nike's ethos of innovation and
excellence but also contribute to building a more inclusive business model that
benefits both the company and its customers.

4. LO3: 6

Analysis of Customer Choice Factors Affecting Nike's Online Retail Business

4.1 Word-of-Mouth

Word-of-mouth (WOM) has become a cornerstone of marketing in the digital age,


fuelled by social media and customer reviews. Positive or negative experiences
shared by customers can significantly shape perceptions of a brand like Nike.
Consumers often trust peer reviews more than traditional advertising, which makes
effective WOM a powerful tool for influencing brand loyalty and purchasing decisions
(Mangold & Faulds, 2009). For instance, customers who share their positive
experiences, whether through social media platforms like Instagram or review sites
like Trustpilot, often encourage peers to consider Nike products. With the rise of
influencer culture, Nike has forged partnerships with personalities who embody its
brand ethos, hence leveraging their followers' trust by amplifying positive WOM.

Conversely, negative reviews can lead to substantial repercussions, affecting brand


reputation and customer trust. For example, if a Nike product receives adverse
feedback regarding quality or customer service, potential buyers might be swayed
against the brand, highlighting the importance of monitoring and managing online
sentiment. To capitalise on positive WOM and mitigate damage from negative
commentary, Nike can integrate user-generated content, testimonials, and influencer
endorsements into their marketing strategy, showcasing authentic customer
experiences and reinforcing engagement.

4.2 Personal Preferences and History


Leveraging customer history and preferences allows Nike to create highly
personalised marketing messages and product recommendations. This technique is
rooted in data analytics, a capability that enables the retailer to track customer
purchases, browsing habits, and engagement with marketing materials. By analysing
these data points, Nike can identify trends such as repeated purchases of specific
types of shoes or apparel, historical preferences regarding colours or collections,
and anticipated future buying behaviours (Kumar, Rahman & Kazmi, 2016).

Data analysis can inform Nike's recommendation algorithms, ensuring that returning
customers see products aligned with their tastes and preferences. For example,
when a consumer logs into their Nike account, they could be greeted with
personalised suggestions that reflect their previous interactions, increasing the
likelihood of conversion. Additionally, Nike can harness customer data to tailor email
marketing campaigns, ensuring that promotional offers resonate with the individual
by aligning with their historical preferences.

4.3 Habits

Shopping habits significantly influence consumer behaviour and can vary based on
customer demographics and engagement strategies. Nike has observed tendencies
among its customers related to shopping times and brand loyalty. Many shoppers
tend to purchase during specific sales events like Black Friday or seasonal discounts
(Verhoef, Neslin & Vroomen, 2007). Understanding these habits allows Nike to craft
targeted marketing campaigns that capitalise on the specific times when customers
are most likely to buy. Moreover, loyalty programs can play a pivotal role in
reinforcing positive shopping habits and nurturing long-term engagement. Nike has
implemented its 'Nike Membership' program, which incentivises customers to make
repeat purchases by offering exclusive access to products and promotional events.
By rewarding loyalty through a points system or exclusive offers, Nike can
encourage customers to establish consistent shopping habits, thereby increasing
overall sales.

4.4 Decision Load

The phenomenon of decision fatigue arises when consumers are faced with too
many choices, leading to a decrease in the quality of their decisions (Baumeister,
Vohs & Tice, 1998). In the context of an online retailer like Nike, customers can be
overwhelmed by the extensive range of products available for purchase. This
plethora of choices can lead to frustration or indecision, ultimately impacting
conversion rates. To alleviate decision fatigue, Nike can implement several
strategies. Simplifying the user interface of their website or app can significantly
enhance the shopping experience. This involves organising products into clear
categories, using intuitive navigation, and providing filtering options that allow
customers to hone in on their preferences quickly. Additionally, Nike can introduce
curated selections, where themed collections are showcased based on recent trends
or seasonal promotions. Lastly, incorporating decision-making aids, such as
comparison tools or personalised quizzes that guide consumers through their
options, could help mitigate the burden of decision-making and bolster customer
confidence in their choices.

4.5 Defaults

Defaults play an essential role in influencing consumer behaviour, particularly when


customers are disengaged or overwhelmed. For instance, if an online retailer like
Nike defaults to subscribing customers to newsletters or pre-selects popular
products during the checkout process, these options can significantly affect
purchasing decisions. Behavioural economics suggests that people often stick with
defaults rather than actively opting out (Thaler & Sunstein, 2008). Nike can ethically
design defaults to enhance the customer experience while benefiting the company.
For example, defaulting a user to opt-in for personalised newsletters can ensure that
customers receive tailored content that meets their interests while also keeping them
engaged with the brand. Similarly, pre-selecting popular or recommended products
upon a user’s visit can streamline the decision-making process, offering customers a
path of least resistance to purchase, ultimately leading to higher conversion rates.

4.6 Choice Architecture

The layout of Nike's digital platforms plays a vital role in guiding customer decisions.
Choice architecture involves strategically designing the way product offerings are
presented to consumers, influencing their purchasing behaviour (Thaler & Sunstein,
2008). Nike can implement various techniques to highlight certain products while
encouraging specific customer actions. For instance, featuring best-selling products
prominently on the homepage or utilising contrasting colours for promotional offers
can catch the eye of customers and propel them toward making a purchase.
Similarly, placing customer reviews and ratings alongside product descriptions
provides valuable social proof, instilling greater confidence in customers’ buying
decisions. By using choice architecture effectively, Nike can create a more inviting
shopping environment that facilitates easier decision-making and enhances overall
customer satisfaction.

In conclusion, various factors propel choices consumers make while shopping on


Nike's online retail platform, from word-of-mouth influence to personal preferences
and shopping habits. By recognising these aspects and their implications for
customer behaviour, Nike can employ tailored marketing strategies and design
choices that reflect an understanding of consumers' motivations and preferences. By
engineering a shopping experience that reduces decision load and employs ethical
defaults while utilising effective choice architecture, Nike can enhance customer
satisfaction, loyalty, and ultimately drive sales in an increasingly competitive e-
commerce landscape.
REFERENCES

Bardhi, F., & Eckhardt, G. M. 2017. Access-based consumption: A new business


model for consumer goods. The Journal of Consumer Research, 130-146.

Baumeister, R. F., Vohs, K. D., & Tice, D. M. 1998. The Strength Model of Self-
Control. Current Directions in Psychological Science, 16(6):351-355.

Brown, J. J., & Reingen, P. H. 1987. Social ties and word-of-mouth referral
behavior. Journal of Consumer Research, 14(3):350-362.

Cialdini, R. B. 2007. Influence: The Psychology of Persuasion. Harper Business.

Cialdini, R. B. 2009. Influence: Science and Practice. 5th ed. Boston: Pearson.

Holt, D. B. 2002. Why do brands cause trouble? A dialectical theory of consumer


culture and branding. The Journal of Consumer Research, 29(1):70-90.

Huang, M., Boulton, C., & So, D. 2020. Ethical Algorithms: Introducing Bias Audits in
AI Systems. Journal of Business Ethics, 162(3):517-533.

Kahneman, D. 2011. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux.

Keller, K. L. 2013. Strategic Brand Management. Pearson Education.

Kotler, P., & Keller, K. L. 2016. Marketing Management (15th ed.). Pearson.

Kotler, P., & Keller, K. L. 2016. Marketing Management. Pearson Education.

Kumar, A., Rahman, Z., & Kazmi, A. A. 2016. A Study on Consumer Behaviour
Towards Online Shopping in India. International Journal of Business and
Management Invention, 5(1):13-20.

Mangold, W. G., & Faulds, D. J. 2009. Social Media: The New Hybrid Element of the
Promotion Mix. Business Horizons, 52(4):357-365.
Maslow, A. H. 1943. A theory of human motivation. Psychological Review,
50(4):370-396.

McCracken, G. D. 1986. Culture and consumption: A theoretical account of the


structure of consumer behaviour. Journal of Consumer Research, 13(1):71-84.

Rosenbaum, M. S. 2009. Consumer Behavior in the Digital Era. Wiley.

Schiffman, L. G., & Kanuk, L. L. (2010). Consumer Behavior. Pearson Education.

Smith, W. K., & Lewis, M. W. 2021. Toward a Theory of Paradox: A Dynamic


Equilibrium Model of Organizing. Academy of Management Review, 36(2):381-403.

Sweeney, C. 2020. Athleisure: The Rise of Sportswear in Street Fashion. Fashion


and Textiles, 7(1):1-12.

Taylor, J. (2013). Cognitive Biases Are Bad for Business. Psychology Today.
Available at: www.psychologytoday.com. [23 August 2024].

Thaler, R. H., & Sunstein, C. R. 2008. Nudge: Improving Decisions About Health,
Wealth, and Happiness. New Haven: Yale University Press.

Thaler, R. H., & Sunstein, C. R. 2008. Nudge: Improving Decisions About Health,
Wealth, and Happiness. Yale University Press.

Verhoef, P. C., Neslin, S. A., & Vroomen, B. 2007. Multichannel Consumer Behavior:
A Review and an Integrative Framework. Journal of Retailing, 83(2):89-101.

You might also like