nike+ presentation
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Rita HaoValeria LambertiPatrick Stoesser
Group Case AnalysisNike+ FuelBand
MKTG 6231FEntertainment MarketingSchulich School of Business
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“Bracelets” that monitor fitness activity
– Track movement and sync results with mobile applications
Relatively new industry product invented in early 2000’s
$400MM market annually (2016)
Dominated by 3 players (97% of market)– Nike– FitBit– Jawbone
Industry Overview
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Private start-up founded in 2009
Wide variety of products
Focus on ‘health’, ‘fitness’, and ‘individualism’
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Entered market in 2006 with Nike FuelBand+ IPod Product
Heavily marketed and advertised
Focus on ‘sporty’, and ‘the Nike community’
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Nike vs. FitBit
Nike FitBit
Entered Market
2006 2009
Average Cost $149 $130
Measurements
Time, Distance, Calories, Steps, Daily Progress, “Nike Fuel”
Time, Distance, Calories, Steps, Elevation
Technology Bluetooth connectivity, 3-axis accelerometer , ambient light sensor, li-on polymer battery
Bluetooth connectivity, 3-axis accelerometer, vibration motor, li-on polymer battery
Market ShareFitBit is a start up with a fraction of the marketing budget of Nike, yet they are dominating the market
Why is this and how can Nike position themselves to increase their market
share?
10% 68%
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Ideological Field of Technology
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The Healthy Consumer Contradiction
Gap between reality and ideal(as experienced in everyday situations) Time
Identity Confirmation(discourse, practices, performances)
Ideological Field of the healthy consumer
The Pursuit of Healthy Living (through Brands)
The Health Conscious ConsumerThe Natural Athlete
Smart, “the every man”, responsible Strong, masculine, fun
Too much work, boring, not funUnrealistic, intimidating, naive
Contradictions
Implicatives Implicatives
Negations
The Healthy Consumer
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The Problem
Nike is trying to win over “The Healthy Consumer”
Marketing message focuses on “The Natural Athlete”– Contradicts message with “The Health Conscious Consumer”– Strong and sporty vs. responsible choices, everyday battles
Appealing to “The Work Machine”– Technology leads to productivity, success, efficiency
FitBit appeals to every other segment– Expressive, ease of use, empowerment, community building,
those intimidated by technology
Given this, how does Nike position FuelBand to gain market share?
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Key Success Factors
A. Strong Brand Recognition– Premium brand– High quality products– The “cool” factor/brand personality
“Nike-as-a-person is exciting, provocative, spirited, cool, innovative, aggressive, and
into health and fitness”
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Key Success Factors
B. Style and features– Different colors and design– Comfort – Silent alarm, water proof, sleep monitoring– Cross-platform wireless syncing (android device)– Social connectivity (NikeFuel community)– “One size doesn’t fit all” - Fitbit
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Key Success Factors
C. Financial sustainability – Nike was the first one into the market
• Experience and technology– Ability to develop new products in house with
minimal risk– Strong history of alliances
• Apple partnership– Selective in M&A– Extremely high marketing budget
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Ansoff’s Four Strategies
Present ProductNike+ Fuel bandNike+ Fuel band SE
New Product
Present MarketAthletes, active people
Market Penetration
Product Development
New MarketEveryday Joe who wants to be more active and healthy
Market Development
Diversification
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Alternative Solutions1. Status Quo
Pros:– Less risky– Serving the same niche market
Cons:– Losing market share (10% Nike vs. 68% Fitbit)– More players coming into the market (LG, Sony, Garmin)– Premium price with less functionality– The “fuel points” system is confusing
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Alternative Solutions
2. Acquire FitBit
Pros:– Big corporation vs. start-up– Access to FitBit’s activity tracking logarithms (trade secrets)– Instantaneous results
Cons:– Financial risk – Cannibalize sales
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Alternative Solutions
3. Market development
Pros:– Develop a new sub brand with a focus on developing a new
market– Improve software compatibility with different operating
systems– Different pricing tiers– New marketing campaign focusing on “healthy people”
instead of “athletes”– Leveraging Nike brand
Cons– Time demanding– Customer perception
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Evaluating Alternatives
Key Success Factors in the Activity Tracking Industry
Nike’s Strength Status Quo AcquisitionMarket
Development
Strong Brand Name
✔ ✔ ✔
Style/features ✔ ✔
Financial sustainability
✔
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Developing a New Association
Sport
Fun
Athletes
ShoesMotivation
Running
Just do it
Trainers
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How?
Nike+ Health sub brand is all about healthy everyday living
Sport Just do it
Sport = HealthKeeping healthy
through sport activities
Just do it = HealthKeeping healthy
through everyday simple and small efforts
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Let’s Take the Field!
Nike+ =
Health
New product features
Review Nike+ ads
Strategic sponsorshi
ps
Online strategy
New spokespers
ons
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Make Health Count! Review Nike+ ads
ACTUAL COMMERCIAL40%-50% of images related to
sportsonly few about everyday
healthy living
NEW COMMERCIAL70% of images related to
everyday healthy activitiesSport is not the only thing
that counts!
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You Know It, It Counts
Contact companies which stimulate their employees to
practice more healthy activities
Sponsor healthy programs organized by high schools and universities
Sponsor city marathons
Strategic sponsorshi
ps
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Web Counts Too
Improve the Nike+ FuelBand community:– possibility to share your “health results” with your friends– users and company generated suggestions on how to keep
you healthy
Facebook and Twitter pages totally dedicated to the new Nike+ and the health topic
YouTube channel integrated with the new commercial and spokespersons’ videos with healthy suggestions
“The Healthiest Nike person” contest
Online strategy
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Perfection Doesn’t Count
The new Nike+ should no longer be associated only with athletes and sports persons.
New spokesperso
ns
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Money (unfortunately) counts
Activities CostNew spot realization 5.000$
New spot broadcasting 400.000$
Sponsorships 2.000.000$
Social Media 200.000$
Contest 10.000$
Spokespersons 1.500.000$
TOTAL 4.115.000$
Cheaper than an acquisition!
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Referenceshttp://www.nytimes.com/imagepages/2006/12/17/business/17buzz_CA0_ready.htmlhttp://www.unilever.com/sustainable-living/betterlivelihoods/Respecting-Human-rights/well-being/http://www.coca-cola.co.uk/about-us/employment-our-people.htmlhttp://mobihealthnews.com/28825/fitbit-jawbone-nike-had-97-percent-of-fitness-tracker-retail-sales-in-2013/http://www.prophet.com/blog/aakeronbrands/135-three-models-of-how-a-brand-personality-impactshttp://www.smartwatchnews.org/top-5-activity-trackers/http://www.fitbit.com/productshttp://www.wired.com/medtech/health/magazine/17-07/lbnp_nike?currentPage=allhttp://reviews.cnet.com/wearable-tech/http://mobihealthnews.com/14884/by-2016-400m-market-for-health-fitness-apps/