Analyzing the Athletic Shoe
Market for SHOE FIEND
Background
You are the marketing analyst for SHOE FIEND, an online athletic shoe store. To date, your company has
done li”le formal marketing research about athletic shoe buyers in the United States. Using the 2014
MediaMark Reporter (MMR) data from GfK, you recently ran a series of reports about the shoe buying
habits of several U.S. consumer segments. At this time, you have decided to focus on the 5 best-selling
shoe brands on your website: Adidas, Asics, Nike, New Balance, and Reebok. A6er looking through the
MMR report options, you decided that the most 78ng question for your purposes was “Did you buy
[SHOE BRAND] in the last 12 months?”.
The report is designed to compare the shoe buying habits of consumers across several di?erent
consumer characteristics: gender, age, and internet use. In addition, you also created three sub-segment
schemes that combined two di?erent segmentation variables: Gender and Age (Men 18-34 and Women
18-34) and Internet use and Age (Heavy Internet users 18-34 years old).
Your Goal
First, review the data from the GfK MMR report. You will use this information to make some inferences
about the brand preferences of the di?erent segments. Follow this, you will combine the information in
the MMR report with some financial assumptions provided by SHOE FIEND to make some
recommendations for future marketing tactics.
The Data
The data in the report can be interpreted in the following manner:
Market Segment Size (000s): The total number US Adults that meet the criteria for the segment
(regardless of whether they did or did not buy a particular shoe brand)
Market Segment Size (%): The same as Market Segment Size (000s), but presented as a
percentage of all US Adults
Estimated Count (000s): The estimated number of U.S. adults within the segment who bought
that particular pair of shoes at least once in the last 12 months.
% of Total: Among all U.S. adults who bought a particular brand of shoes in the last 12months,
the % of them who belong to that particular segment.
% within Mkt. Seg who Bought in last year: The percentage of people within a particular segment
who bought the shoe brand within the last 12 months
Index: The likelihood of a member of the segment to have bought the particular shoe brand in
the last 12 months, indexed to the likelihood of an average US adult (the US average equals an
index value of 100). Thus, an index value of 120 can be interpreted as members of that segment
being 20 percent more likely than the national average to have bought a particular brand of
shoes in the last 12 months.
[Red is withheld from students; these are calculated exercises]
Total Men Women
Adults
18-34
Men
18-34
Women
18-34
Internet
1 (Heavy
Users)
Adults
18-34 &
Heavy
Internet
Market Segment Size (000s) 237,115 114,159 122,916 71,961 35,867 36,037 47,361 21,985
Market Segment Size (%) 100 48.1 51.8 30.3 15.1 15.2
(Q1)
20.0 9.3
ADIDAS
Estimated Count (000s) 17,096 9,635 7,461 6,973 4,053 2,919 4,163 2,392
% of Total 100 56.36 43.64
(Q2)
40.78 23.71 17.08 24.35 13.99
% within Mkt. Seg. who Bought last year 7.21 8.44 6.07 9.69 11.3 8.1 8.79 10.88
Index 100 117 84 134 157 112 122 (Q3) 151
ASICS
Estimated Count (000s) 11,186 4,851 6,335 2,948 1,321 1,627 2,453 899
% of Total 100 43.37 56.63 26.36 11.81 14.55 21.93 8.04
% within Mkt. Seg. who Bought last year 4.72 4.25
(Q4)
5.16 4.1 3.68 4.51 5.18 4.09
Index 100 90 109 87 78 96 110 87
NIKE
Estimated Count (000s) 49,453 24,685 24,768 20,808
(Q5)
10,841 9,966 12,233 6,818
% of Total 100 49.92 50.08 42.08 21.92 20.15 24.74 13.79
% within Mkt. Seg. who Bought last year 20.87 21.63 20.16 28.93 30.23 27.64 25.82 31
Index 100 104 97 139 145 132 124 149
NEW BALANCE
Estimated Count (000s) 25,338 12,488 12,850 4,931 2,681 2,250 4,816 1,638
% of Total 100 49.29 50.71 19.46 10.58 8.88 19.01 6.46
% within Mkt. Seg. who Bought last year 10.69 10.94 10.46 6.86 7.47 6.24 10.17 7.45
Index 100 102 98 64 70 58 95 70
REEBOK
Estimated Count (000s) 9,919 5,234 4,685 2,891 1,681 1,209 2,149 952
% of Total 100 52.77 47.23 29.14 16.95 12.19 21.66 9.6
% within Mkt. Seg. who Bought last year 4.18 4.59 3.81 4.02 4.69 3.35 4.54 4.33
Index 100 110 91 96 112 80 108 103
Task 1: Correct the Table:
Unfortunately, it appears that someone accidentally le6 some of the calculated values blank in
the table. Luckily, you know you can use the other available information in the table to calculate the
missing values.
Q1: Calculate the Market Segment Size (in %) for Heavy Internet Users
oCALCULATION =
Q2: Calculate the % of Total Market for Adults 18-34 who Bought Adidas in the last 12
months
oCALCULATION =
Q3: Calculate the Index for Adults 18-34 who are Heavy Internet Users who Bought
Adidas in the last 12 months
oCALCULATION =
Q4: For the Women column, calculate the % within Mkt. Segment who Bought Asics in
the last 12 months
oCALCULATION =
Q5: For Men 18-34, calculate the Estimated Count (000s) who Bought Nike shoes in the
last 12 months
oCALCULATION =
Task 2: Making Inferences about Athletic Shoe Buyers
1. Generally speaking, does it appear that heavy internet users are more or less likely than the
average US adult to have bought these shoe brands in the last 12 months?
a. ANSWER: Heavy internet users are generally (slightly) more likely to have bought these
2. If you were going to run a series of advertisements for SHOE FIEND targeting younger adult
women, which brand would you recommend to feature on the advertisement? Which shoe
brand would you be disinclined to feature? Why?
a. ANSWER: Adidas and Nike are both good answers here, but class debate can emerge on
3. Lately, management for SHOE FIEND has worried that its positioning has completely overlooked
serving the wants of “older” consumers (over 45 years old). If SHOE FIEND decides to market
toward older U.S. adults, which of the brands should SHOE FIEND be more conscientious about
featuring?
a. ANSWER: The answer here is New Balance, although the class could debate about the
merits of Asics and Reebok as well. For New Balance, only 19.46% of all people who
Task 3: Estimating the Value of the Shoe Buying
Segments
Using some assumptions provided by the CFO, you are tasked with estimating the annual sales (in $) for
each shoe buying segment. To do so, you will need to make the following assumptions:
oAverage number of pairs bought within 12 months
oAverage price of shoe brand
These numbers are estimates that came from the internal e?orts of your financial analyst team.
If someone buys at least one pair of a shoe
brand in the last 12 months, how many total
pairs of that brand do they buy, on average?
Average
price per
shoe pair
Adidas 2.0 $70
Asics 2.0 $70
Nike 1.5 $75
New Balance 2.0 $70
Reebok 1.5 $65
1. What are the total estimated sales of these 7ve shoe brands for Heavy Internet users in the last
12 months?
a. CALCULATION =
2. For a random U.S. adult woman, how much would we estimate she spent on Asics shoes in the
last 12 months?
a. CALCULATION =
Discussion and Debate:
1. Based solely on the information that was analyzed, do you think it makes more sense for SHOE
FIEND to: treat the whole market as homogeneous (no segmentation), use a single variable
segmentation scheme (just gender, just age, just Internet usage), or a multivariate segmentation
scheme? Regardless of your answer, identify the advantages and limitations associated with
your argument.
2. You are about to ask a junior analyst at SHOE FIEND to run another MMR report for you. Which
additional variables do you think would be best to add into the report for segmentation
purposes? Why?