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  • 1. Group Case AnalysisNike+ FuelBand MKTG 6231F Entertainment Marketing Schulich School of BusinessRita 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 2000s$400MM market annually (2016) Dominated by 3 players (97% of market) Nike FitBit Jawbone 1 3. Private start-up founded in 2009 Wide variety of products Focus on health, fitness, and individualism2 4. Entered market in 2006 with Nike FuelBand+ IPod Product Heavily marketed and advertised Focus on sporty, and the Nike community3 5. Nike vs. FitBit NikeFitBitEntered Market20062009Average Cost$149$130MeasurementsTime, Distance, Calories, Steps, Daily Progress, Nike FuelTime, Distance, Calories, Steps, ElevationTechnologyBluetooth 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 ShareWhy is this and how can Nike position themselves to increase their market share? 4 6. Ideological Field of Technology5 7. Ideological Field of the healthy consuThe Healthy Consumer Contradiction The Healthy ConsumerThe Natural AthleteThe Health Conscious Consumer Contradictions Smart, the every man, responsibleStrong, masculine, fun Negations ImplicativesImplicativesUnrealistic, intimidating, naiveGap between reality and ideal (as experienced in everyday situations)Too much work, boring, not funTimeIdentity Confirmation (discourse, practices, performances)The Pursuit of Healthy Living (through Brands) 6 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 battlesAppealing to The Work Machine Technology leads to productivity, success, efficiencyFitBit appeals to every other segment Expressive, ease of use, empowerment, community building, those intimidated by technologyGiven this, how does Nike position FuelBand to gain market share? 7 9. Key Success Factors A. Strong Brand Recognition Premium brand High quality products The cool factor/brand personalityNike-as-a-person is exciting, provocative, spirited, cool, innovative, aggressive, and into health and fitness8 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 doesnt fit all - Fitbit9 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 budget10 12. Ansoffs Four Strategies Present Product Nike+ Fuel band Nike+ Fuel band SEPresent MarketNew ProductMarket PenetrationProduct DevelopmentMarket DevelopmentDiversificationAthletes, active peopleNew Market Everyday Joe who wants to be more active and healthy11 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 The fuel points system is confusing12 14. Alternative Solutions 2. Acquire FitBit Pros: Big corporation vs. start-up Access to FitBits activity tracking logarithms (trade secrets) Instantaneous results Cons: Financial risk Cannibalize sales13 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 brandCons Time demanding Customer perception 14 16. Evaluating Alternatives Key Success Factors in the Activity Tracking IndustryNikes Strength Strong Brand Name Style/features Financial sustainabilityStatus QuoAcquisitionMarket Developmen t 15 17. Developing a New Association SportJust do it FunTrainer sRunnin gAthletes Motivatio nShoes 16 18. How? Just do itSportSport = HealthJust do it = HealthKeeping healthy through sport activitiesKeeping healthy through everyday simple and small effortsNike+ Health sub brand is all about healthy everyday living17 19. Lets Take the Field! New product featuresNew spokesperso nsOnline strategyNike+ = HealthReview Nike+ adsStrategic sponsorship s 18 20. Make Health Count!ACTUAL COMMERCIAL 40%-50% of images related to sports only few about everyday healthy livingReview Nike+ adsNEW COMMERCIAL 70% of images related to everyday healthy activities Sport is not the only thing that counts! 19 21. You Know It, It CountsStrategic sponsorship sContact companies which stimulate their employees to practice more healthy activitiesSponsor healthy programs organized by high schools and universities Sponsor city marathons20 22. Web Counts TooOnline strategyImprove the Nike+ FuelBand community: possibility to share your health results with your friends users and company generated suggestions on how to keep you healthyFacebook 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 contest21 23. Perfection Doesnt CountNew spokesperson sThe new Nike+ should no longer be associated only with athletes and sports persons.22 24. Money (unfortunately) counts ActivitiesCostNew spot realization5.000$New spot broadcasting400.000$Sponsorships2.000.000$Social Media200.000$Contest10.000$Spokespersons1.500.000$TOTAL4.115.000$Cheaper than an acquisition! 23 25. 24 26. References ady.html