1. Group Case Analysis
Nike+ FuelBand
MKTG 6231F
Entertainment Marketing
Schulich School of Business
Rita Hao
Valeria Lamberti
Patrick Stoesser
2. Industry Overview
“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
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3. Private start-up founded in 2009
Wide variety of products
Focus on „health‟, „fitness‟, and „individualism‟
2
4. Entered market in 2006 with Nike FuelBand+ IPod
Product
Heavily marketed and advertised
Focus on „sporty‟, and „the Nike community‟
3
5. 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, 3Bluetooth connectivity, 3-axis
axis accelerometer , ambient accelerometer, vibration motor,
10%
68%
light sensor, li-on polymer
li-on polymer battery
battery
FitBit is a start up with a fraction of the marketing budget of Nike, yet they
are dominating the market
Market Share
Why is this and how can Nike position themselves to
increase their market share?
4
7. The Healthy Consumer
Contradiction
The Healthy Consumer
The Natural Athlete
The Health Conscious Consumer
Contradictions
Smart, “the every man”, responsible
Strong, masculine, fun
Negations
Implicatives
Implicatives
Unrealistic, intimidating, naive
Gap between reality and ideal
(as experienced in everyday situations)
Too much work, boring, not fun
Time
Identity Confirmation
(discourse, practices, performances)
The Pursuit of Healthy Living (through Brands)
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8. 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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9. 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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10. 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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11. 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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12. Ansoff’s Four Strategies
Present Product
Nike+ Fuel band
Nike+ Fuel band SE
Present Market
New Product
Market Penetration
Product
Development
Market Development
Diversification
Athletes, active people
New Market
Everyday Joe who
wants to be more
active and healthy
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13. Alternative Solutions
1. 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
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14. 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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15. 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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16. Evaluating Alternatives
Key Success Factors in the Activity Tracking
Industry
Nike‟s Strength
Strong Brand
Name
Style/features
Financial
sustainability
Status Quo
Acquisition
Market
Developmen
t
✔
✔
✔
✔
✔
✔
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18. How?
Just do it
Sport
Sport = Health
Just do it = Health
Keeping healthy
through sport
activities
Keeping healthy
through everyday
simple and small efforts
Nike+ Health sub brand is all about
healthy everyday living
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19. Let’s Take the Field!
New
product
features
New
spokesperso
ns
Online
strategy
Nike+
=
Health
Review
Nike+ ads
Strategic
sponsorship
s
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20. Make Health Count!
ACTUAL COMMERCIAL
40%-50% of images related to
sports
only few about everyday healthy
living
Review
Nike+ ads
NEW COMMERCIAL
70% of images related to
everyday healthy activities
Sport is not the only thing that
counts!
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21. You Know It, It Counts
Strategic
sponsorship
s
Contact companies which stimulate their employees to
practice more healthy activities
Sponsor healthy programs organized by high schools and
universities
Sponsor city marathons
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22. Web Counts Too
Online
strategy
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
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24. Money (unfortunately) counts
Activities
Cost
New 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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