The concept of marketing forms an integral part of the business world and along with the concept of innovation is generally considered to be the major factors that influence the business of any business enterprise (Kobayashi, 2012). The machinery of marketing is mainly concerned with the management or the regulation as well as the monitoring of the exchange or the trade relations between the business enterprises and the end users of the products or the services offered by the concerned business enterprises and its aspects (Kobayashi, 2012). Moreover, in the present times it is also seen that to further enhance this exchange relationship between the customers and the business enterprises, the business enterprises take the help of various kinds of innovative strategies as well as policies (Hartley & Claycomb, 2013). For example, one of the most important strategies that the diverse business enterprises usually take the help of are the use of the modern techniques of promotion like the use of social media, electronic media and other media tools (Mahdi et al., 2015). It is significant to note that since the traditional times the marketing focus of the various diverse business enterprises has been on the effective use of the concept of promotion so that they are able to earn a higher percentage of profit (Hartley & Claycomb, 2013).
In the present times the requirements of the present day business world has changed in a significant manner keeping in view the changing needs of the people of the world and also the changing landscape of the world be it terms of technology, politics, social structure or others (Mahdi et al., 2015). In the wake of this particular change the marketing plan which is being used by the diverse business enterprises needs to incorporate not only the promotional plans but other important entities of marketing like market research, target market, positioning, customer base, market strategy, budget, metrics, effective management of the customers and others (Angioni, Cabiddu & Di Guardo, 2012). The primary idea for undertaking such a long list of activities for the process of the marketing of the products or the services offered by them is to mitigate the high amount of competition that they face in the ever competitive business environment and at the same time to gain a significant amount of competitive leverage over their competitors (Angioni, Cabiddu & Di Guardo, 2012). These concepts are even applicable to the products or the services offered by the sports industry as well and as a matter of fact it is seen that the sports industry currently integrating the different marketing concepts of the business world to effectively market the products or the services offered by them to the customers (De Mooij, 2013). Furthermore, it is also seen that the various sports companies like Nike, Adidas and others in order to capture a greater customer base are increasingly offering diverse kinds of smart products or services to the customers. This report will discuss about the smart product Nike Fuelband and the marketing approach taken by the company Nike for the marketing of the concerned product.
The company Nike established in the year 1964 specializes in the manufacture of sports garments, apparels and other related accessories (Nike Australia, 2018). Although headquartered in the nation of the United States of America the company currently has its business centers in the different parts of the world and was founded by “Bill Bowerman and Phil Knight” (Nike Australia, 2018). As a matter of fact that the company was initially called by the name of “Blue Ribbon Sports” and it was only in 1971 that the name of the company was changed to Nike (Nike Australia, 2018). Furthermore, the company under discussion here is the largest company in the genre of the companies that manufacture sports gears, accessories, apparels and other related products and stands at the 205th position among the different companies of the world in terms of the yearly revenue earned by them (Fobes.com, 2018). The performance of the company under discussion here over the years in terms of finance is being represented by the below given figure-
Figure 1: Financial Performance of Nike
Source: Factset, Bloomberg, S&P Cap IQ; Forbes.
Nike is known not only for the quality of the sports products that it offers to the customers from the diverse parts of the globe but at the same time for the use of innovative ideas and also the recent technology for the manufacture of their products (Ferguson et al., 2015). A pertinent example of this is the Fuelband offered by the concerned company to its customers (Ferguson et al., 2015). This device was launched by the company Nike in 2012 and it came in two color variations, namely, black and ice color (Nike Australia, 2018). The introduction of this particular product in the arsenal of the wide array of sports related products offered by the company saw an impressive rise of 18% in the sale of the products offered by the concerned company (Nike Australia, 2018). However, the launch of this particular product is generally seen as an initiative on the part of the part of Nike to mitigate the high level of competition which it was facing from Jawbone UP, Basis Watch, and Fitbit Flex or for that matter even Fitbit Tracker family (Tucker et al., 2015). This particular offering of the company under discussion belongs to the genre of the fitness trackers and worked in conjugation with the iphones, ipads or any other android devices which allowed the Fuelband to use the Bluetooth of theirs to transfer the data collected to the server of Nike (Nike Australia, 2018). The primary idea behind the manufacture was to measure the physical activities or the energy spent by them through the use of this particular device and at the same to compare them with the other members of the community (Nike Australia, 2018). Thus, for this particular purpose the company under discussion here even went on to create software wherein different people from diverse parts of the world will be able to compare and contrast the level of their fitness with the other people. However, it is significant to note that the effectiveness of the device depended on the effectiveness of the software which was developed by the company but it was soon seen that the company started to face various issues not only regarding the maintenance of the software but also regarding the future development of the same (Tucker et al., 2015). Thus, the company had to stop the production of the production of the product under discussion here 2015 although it promised that the software which supports the device would still be operational so that the existing users can make the full use of the products that they have purchased from the concerned company (Tucker et al., 2015). However, in 2018 Nike stopped the software stating that it would be used for further research sand this caused a significant amount of damage to the brand image of the concerned company since there are thousands of users of Fuelbands manufactured by the company all over the globe (Tucker et al., 2015).
The concept of fitness has become an integral part of the psychology of the people of the present times and it is a reflection of this particular fact that the majority of the human beings want to be physically fit (Pande et al., 2013). This is generally attributed as one of the major reasons for the increasing amount of money which is being spent on the various physical fitness related products or services by the people of the present times. This particular trend in not only being reflected in the increasing insistence of the people about the consumption of healthy food products but also in their increasing insistence to indulge in various kinds of physical fitness activities like working out, regularly going to the gym and others (Pande et al., 2013). It is precisely this need for fitness which is dominating the psychology of the people of the present times that the product Fuelband offered by the company Nike wishes to bank on. The basic lacuna behind the manufacture of this particular product is the thought that it would be help a particular individual to measure the physical activities or the amount of calories burned by a particular individual in a day or a lesser amount of time (Huang et al., 2016). In addition to this, the device at the same time allowed the users to measure the number of steps that they have taken within a single day or the amount of energy spent by them in a specific period of time like one day or a few hours (Valentín & Howard, 2013). The best part about the fitness related service by the fitness tracker or the Fuelbands to the users was the fact that the company Nike had created an online community where users of the concerned device from the diverse parts of the globe would be able to compare and contrast the results provided by the concerned device regarding their physical activity and their level of fitness with the others users of the same device (Huang et al., 2016). This not only helped the users to monitor the level of their own fitness and also the change in the level of fitness that they have undergone if any at all but at the same time the fitness results of the other users also propelled the lesser fit users to undertake more efforts to improve their fitness level (Valentín & Howard, 2013). Furthermore, the online community created by the company under discussion here also helped the users to show the entire community the fitness transition that they have undertake but at the same time helped them to get fitness tips from the other users of the same device (Pande et al., 2013). Thus, it can be said that the device was able to utilize the psychological need for fitness of the people from the diverse parts of the world for the manufacture as well as the marketing of this particular product.
The company since the year of its foundation in the year 1964 provides various kinds of sports accessories like shoes and apparels to the customers from the diverse parts of the world (Nike Australia, 2018). It is significant to note that these sports accessories and apparels are known not only for their high or superior quality but at the same time for taking into effective consideration the needs of the sport or the physical activity the user would be undertaking (Fritz et al., 2014). It is a reflection of the high quality sports accessories and apparels offered by the concerned company and also the positive brand image which the company enjoys that some of the popular sportsmen of the modern era have endorsed the products offered by them on the sports fields like Michael Jordan, Ronaldinho and others (Nike Australia, 2018).
In the recent times it is also seen that the company has launched what is called by the name of street fashion and this line of product offers to the customers the kind of shoes or other related accessories that they can use on an everyday basis while walking through the common streets (Zuckerman & Gal-Oz, 2014). However, the arrival of the 21st century saw a drastic change in the kind of products offered by the company and the use of innovation and the manufacture of products which are likely to provide the users a competitive edge over their competitors in the sports gained prominence (Fritz et al., 2014). In this particular context mention needs to be made of “Air Zoom Vomero running shoe” which was launched in the year 2006 and was manufactured taking into consideration the technology which are being used for the manufacture of air bags. The use of this particular technology enabled the concerned company to make the shoe 40% lighter in comparison to the ones offered by the other companies (Nike Australia, 2018). In addition to this, the increasing insistence of the company on the concept of fitness and its related aspects also lead the company under discussion here to launch new products which were drastically different from the ones offered by the other companies. The “Nike+ products” belong to this particular genre of products offered by the company wherein it is seen that the accessories or the shoes manufactured by the company contains a device which in turn is connected to the iphone or other android devices of the users and the required information is being transferred by the device in the accessory to the online software of the company which in turn can be accessed by the iphone or other android devices of the users (Nike Australia, 2018). It is significant to note that it is to this category of products offered by the company Nike that the Fuelbands launched by the company in the year 2012 belongs. Therefore, it can be said that the use of recent technology and also the effective use of the concept of innovation is nothing new for the company and the fitness measuring device under discussion here, Fuelband, fits into the existing portfolio of the concerned company.
Nike is not only one of the most popular sports of the world but at the same time one of the used ones as well (Zuckerman & Gal-Oz, 2014). Furthermore, in contrast to the companies like Adidas, Puma and others which have the majority of their customer base either in their own parent nation or in some other host nation the company Nike enjoys a complete monopoly in the sports market of USA and also holds the majority of the market share of the sports industry in the other nations of the world (Rosenberger et al., 2016). The below given figure is an indicative of this particular fact-
Figure 2: Comparison of the financial performances of Nike, Puma and Adidas
Source: Forbes, 2018
The Fuelbands although initially launched in the nation of the USA was soon launched in the nation of Canada as well following the success of the product in USA (Nike Australia, 2018). Furthermore, within a very short time the product was launched in almost all the nations of the world and at the same time was much appreciated as well. It is significant to note that the company stopped the production or the manufacture of the concerned product in the year 2015 but still in the year 2018 when the company decided to shut down the software on which the concerned product operated there were still millions of users of the product from the different parts of the world (Nike Australia, 2018). Another significant fact to note about the product is the fact when the product was launched in 2012 it took only 4 minutes to for the company to sell all its first version of the Fuelbands (Nike Australia, 2018).
The comparative analysis of the revenue earned by the company with its other competitors clearly indicates that the customer base of the company under discussion here is much larger than the ones of the other companies. In addition to this, it is seen that the majority of the people of the present times are interesting in the concept of fitness and at the same time want to become physically fit (Rosenberger et al., 2016). The company Nike utilizes this particular psychology of the people from the diverse parts of the globe for the manufacture of the product under discussion (Lee, Kim & Welk, 2014). Furthermore, the product received widespread support at the time of its launch and was endorsed by some of the biggest names in the sports world like “Jimmy Fallon, LeBron James, Kevin Durant, Lance Armstrong, and Serena Williams” (Nike Australia, 2018). It is a reflection of this particular fact that after the launch of this particular product the sale of the products of Nike increased by an impressive 18% (Lee, Kim & Welk, 2014). An interesting fact to note is that the majority of the people who purchased the product under discussion here belonged to the age bracket 20-40 years of age (Lee, Kim & Welk, 2014). It was seen that the device not only provided the individuals the opportunity to quantify the physical activities but at the same time trophies, Fuel Points and the other benefits that the users received at the online community created by the company also motivated them in a significant manner to purchase and also to use the device (Clawson et al., 2015). Thus, it can be said that the company under discussion here undertook thorough marketing research to come up with the unique idea for the manufacture of the product under discussion here. However, the scope or the future prospects of the concerned product would have been much better had the company under discussion here been able to take care of the software on which the entire device operated in a much effective manner (Clawson et al., 2015).
The Fuelbands became an instant success immediately after its launch in the United States of America in 2012 (Nike Australia, 2018). Following the success that the product received in the domestic market of the USA the company launched the concerned product into the nation of Canada to check the results that it would get before embarking on a global campaign (Nike Australia, 2018). However, the success that the product received in the nation of Canada removed the faint doubts that the company had about the concerned product and by the end of the year 2012 the product was made available in all the nations of the world where the company Nike was operational like Australia, Germany, New Zealand, United Kingdom and others (Nike Australia, 2018). The success which the product received due to the global expansion policy followed by the concerned company was reflected in the 18% sale growth of the products offered by the company (Nike Australia, 2018).
The Nike Fuelbands belongs to the product extension category of the Nike+ products (Nike Australia, 2018). It is significant to note that the Nike+ products took the help of various kinds of electronic devices which were implanted in the shoes or the other products and they in turn were connected with the iphones or the android phones of the use (Nike Australia, 2018). Thus, it can be said that the product under discussion here built on the technology used for the manufacture of the earlier products of the same company. It is significant to note that the product not only used by the technology which was used for the manufacture of Nike+ products but at the same time tried to cover up their shortcomings with the hope of delivering the best quality products to the customers of the concerned company (Yuehong et al., 2016).
Nike is one of the largest brands of the world and thus the company took the help of various sports celebrities like “Jimmy Fallon, LeBron James, Kevin Durant, Lance Armstrong, Serena Williams and others to promote the product under discussion here (Nike Australia, 2018). In addition to this, the company also took the extensive help of the modern means of promotion like online advertisements, use of electronic media and others (Mahar et al., 2014). Moreover, it was also seen that the product was marketed as well as promoted at various sports events as well (Mahar et al., 2014). In addition to this, the company provided information to the customers way before it even started the process of manufacturing it and this particular fact helped the company in a significant manner to build anticipation for the concerned product among the customers which was reflected in the urge of the customers to buy the product as soon as it was launched. It is a reflection of all these marketing initiatives undertaken by the concerned company that the product under discussion here within a very short time was able to gain a significant amount of success (Mahar et al., 2014). Furthermore, the company at the same time used the strategy of product differentiation for the process of the manufacture of the Fuelbands offered by the company. It is significant to note that the Fuelbands tried to overcome the shortcomings of the similar kind of products not only in terms of the design of the concerned but at the same time in terms of the value provided by the product to the customers as well. The endorsements performed by the various star players for the Fuelbands also helped the cause of the product in a significant manner.
Conclusion
To conclude, the genre of sports marketing is a very wider one and generally it is seen that the majority of the organisations related to the sports industry take the help marketing strategies as well as principles that are widely used in the world of business. However, at the same time it is also seen that sports industry itself has undergone transformation keeping in view the changes that have undergone in the landscape of the sports and also in the world. Thus, it is seen that the customers are now more interested in the various smart products which are likely to provide multiple benefits to them. One such product which gained a significant amount of popularity in the recent times was the Nike Fuelband which was launched by the company Nike in the year 2012. However, it is significant to note that there are several factors that the various organisations need to take into effective consideration before the launch of any product like the customer base that they would be targeting on the basis of which the attributes as well as the qualities of the product will be designed, budget consideration, marketing strategies that would be used for the promotion as well as the marketing of them and others. Furthermore, the success or the failure of any product depends on the effective consideration of all these factors.
To what extent the company Nike was able to integrate the concept of fitness within the framework of the Fuelband offered by them to the customers?
The company Nike since the year of its foundation has taken the help of diverse kinds of themes for the manufacture of the products or the services offered by them to the customers (Dean, 2014). For example, initially the company used the theme of the promotion of the sports industry and it was with this particular objective that the various sports shoes and other accessories offered by the concerned company were related to the sports industry (Dean, 2014). However, in the present times it is seen that the people have become much more conscious about the level of their fitness than they are about the various kinds of sports (Hartley & Claycomb, 2013). Thus, the company Nike by means of the launch of this particular product has tried to capitalise on this particular psychological need of the people of the present times (Hartley & Claycomb, 2013). Furthermore, the users get the ability to monitor as well as measure the amount of their physical activities and the amount of calories that they have burned (Hartley & Claycomb, 2013). Thus, it can be said that the entire lacuna of the product is based on the concept of fitness itself.
What factors enticed the users of the Nike Fuelbands to continue the use of them? What were the incentives that the users got through the use of the concerned devices?
The primary factor which motivated the various users of the Nike Fuelbands was the fact ability that the product provided to the opportunity to the users to check the amount of physical activity that they have performed during the course of the entire day (Van den Driest & Weed, 2014). Furthermore, this activity monitor also helped the users to find out the amount of calories that they have burned in a single day or the amount of fat that they have burned in addition to providing a detailed account of all the physical activities that they have undertaken during the course of the entire day (Van den Driest & Weed, 2014). Furthermore, the users got the opportunity to compare and the contrast their results with the ones that the others have got during the course of the entire day over the online community created by Nike (Shank & Lyberger, 2014). This is important since many times it was seen that the users felt motivated by seeing the scores of other individuals to undertake more extensive fitness activities. Moreover, the users were also rewarded with trophies as well as Fuel Points which further motivated these individuals to indulge in extensive fitness enhancing activities (Shank & Lyberger, 2014).
Was the promotional strategy adopted by Nike for the promotion of the Fuelbands an effective one?
The company Nike for the promotion of the Fuelbands offered by them took the help of the modern mechanisms of promotions. It is significant to note that the modern forms of promotion like the social media, electronic media and others are not only inexpensive but at the same time help the various organisations to reach out to a much larger customer base (Mahdi et al., 2015). It was seen that the company under discussion here for the promotion of the Fuelbands offered by them took the help of various online advertisements and other kinds of online campaigns so as to reach out to a large number of customers. In addition to these, it was also seen that some of most famous athletes of the world like Serena Williams, Ronaldinho and others endorsed the products both on and off the sports field (Nike Australia, 2018). In addition to these, the positive brand image that the company enjoys almost all over the world also helped in a substantial manner to make the product under discussion here a success from the perspective of the company (Mahdi et al., 2015).
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