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Nike Fuel Case Study

 

Nike Fuelband: The Future of Exercise?

Nike Fuel Case Study

The Nike FuelBand is a new and innovative way to track an individual’s daily physical activity.  Whether its walking, running, or jumping this digital wristband has the capability to calculate every step taken and every calorie burned. The band’s “sports-tested accelerometer” gives accurate readings of a user’s daily movement.

The data on the Nike FuelBand can be linked to a computer, smartphone or iPod. Here, users can set exercise goals and monitor progress since purchasing the band.  The application also holds a social media feature where users can share their recent exercise activity, such as new personal bests and workout streaks, to their friend s and family through Facebook or Twitter.

The Nike FuelBand can be purchased at any Nike retail store or online through Nike.com.  The bands are also sold through Apple retail stares and Apple.com. They are sold at a price point of $149 and come in three different sizes and colors.  The biggest competitors to the Nike FuelBand are Jawbone Up wristband and Fitbit’s Flex band. These two products are both priced at $99.99 and include activity tracking systems through wristbands and smartphone applications.

 

Target Market

The target market for this product are athletic individuals ages 24 to 35 with medium-high disposable income.  Individuals in this age range tend to be very active and exercise either daily or weekly. Individuals in this age range and economic class also tend to have high social media usage.  18% of all individuals in this age range frequently use social media websites. This type of consumer would most likely engage in Nike FuelBand’s competition where friends and family compare exercise goals and achievements. The objective of this target market is to find the fastest and hippest way to work out.  These consumers value quality and image just as much as price.

The slogan for this product is “Life’s a sport, make it count.” This competitive nature, is most embodied by the young professional. Due to the high price of this for-pleasure product, individuals must have relatively secure financial stability. This price is probably too steep for average college student’s budget, thus the typical consumer would be someone who is one or two years out of college with a steady paying job.  The purchasing decision would involve the individual using the product, for most people this age are not financially dependent on their parents or others. This segment, due to their high internet and technology usage, would also be very likely consumers to purchase products online through their computers, tablets, and smartphones.

Current Promotional Efforts

Nike is a marketing powerhouse as it has carefully crafted its brand to be one of the most recognized brands in the world.  It uses all of the mainstream media to communicate its brand across several platforms for most if not all of their products creating a Nike community across the world.  Some of their most popular promotional efforts have been through the use of social media such as Facebook, Twitter, YouTube, and Pinterest.

Facebook

Nike has specifically crafted a Facebook Page “Nike+ FuelBand” for this particular product.   This page was created January 19, 2012 and has since then accumulated over 165,773 “likes.”  The page is a success in the sense that it actively engages its followers in two-way communication and receives hundreds and even thousands of “likes” on each of its posts, as well as countless shares.  This is a large feat for any company utilizing social media.

The Nike+ FuelBand Facebook page has a beautiful assortment of media enticing its followers to engage and be inspired to continually use the product, as well as constantly working to build a community of users.  One of the more current campaigns they are advertising on their Facebook is working to get user to pledge NikeFuel to a collegiate team.  For example, you can go to Https://www.nike.com/fuelyourteam and join in on the competition to increase FuelPoints for your team (currently Syracuse is in 19th place).  They also use vivid images, photographic campaigns, interactive video, and URLs linking back to their other social media platforms such as YouTube videos and twitter trends.

The Facebook page is also used positively to offer support.  One customer expressed their dismay after their battery was not functioning properly and within two comments of the complaint, the Nike+ FuelBand page tagged them and responded with how they can get support (See Appendix A).  This is an extremely strong display of great customer service and how companies can really leverage social media to best meet the needs of their customers.

Twitter

Nike’s Handle for the NikeFuel Band is “@NikeFuel” where its info states its tagline: “Life is a sport.  Make it count.” as well as providing a short product description: “The Nike+ FuelBand tracks your all-day activity and helps you do more.”.  Both of these aspects are important to intrigue the current user or prospect user to follow the product/brand as well as educate them briefly on what the product actually is.  This Twitter account has over 123,635 followers and has released over 25,509 Tweets into the Twitterverse.  The account shares tweets several times throughout the day on what seems to be a consistent day-to-day basis.

Overall the twitter account for the Nike+ FuelBand is used to actively engage users by directly replying to tweets, reminding users to synch their devices, conversing about current sports teams, and motivating users to continue to reach their goals.  The majority of the activity on their twitter seems to be directly in response to its followers in a very personal and direct manner (See Appendix B).

YouTube

Nike also has a very strong presence on YouTube.  Specifically for their Nike+ FuelBand product, Nike only has one playlist.  The playlist is entitled “Nike+ FuelBand” which has 16 videos all about the product specifically.  There are several commercials, a look inside “NikeFuel Missions” which is an online game, personal accounts of using the device, inside stories, and several video campaigns for various initiatives such as their March Intensity #Counts promo.  The YouTube page also links to all of their other social media platforms such as Twitter, Facebook, and Instagram.  The videos range in number of views that go from as low as 3,968 to as high as 2,079,539 views for any given video.  The playlist itself has only received 27 likes and 1 dislikes, which seems to be either very low for Nike or a very unused function on YouTube in general.

Pinterest

On Pinterest Nike has a few different accounts which create boards and add pins.  On the Nike Women account, there is a board called “Nike+ Arm Party” which displays the Fuelband as an accessory to be assimilated into everyday life, turning the fitness monitor into a fashion accessory.  This Pinterest board encourages fans to share Pictures with the hashtags #nike and #armparty so that Nike can display the fashionable looks.  Many pictures have received several likes as well as repins and seems to be a successful way to promote the brand to women specifically who are the main users of a site such as Pinterest.  The Nike Women account itself has over 7,999 followers and 26 pins in total.

Analysis of Missed Opportunity

Although Nike has a substantial portfolio of promotional efforts across the board there are still many opportunities for this powerhouse to improve on their current efforts as well as capitalize on missed opportunities.  Through the analysis of Nike FuelBand’s current promotional efforts several of these opportunities have been identified.

The first opportunity is the use of hashtags on twitter.  Currently, on the Nike+ FuelBand twitter account a few hashtags have been created by Nike to start trending the Nike FuelBand and similar conversation, some of these being: #counts, #SXSWcounts, #SXSW, and #FuelCheck, just to name a few.  Looking into the effectiveness of their hashtag trending attempts, it seems to be a little too unspecific with the #counts trend.  If you search that on twitter, the majority of the chatter is not Nike+ specific in any regard.  On the other end, #FuelCheck, since it uses the “Fuel” —a direct relation to the product—almost all of the conversation is trending about goals users are overcoming.  Overall, the Nike+ FuelBand account can better use hashtags appropriately by making them more specific to the product itself in order to promote the brand.  By making the hashtag more product specific, you can more easily avoid the unrelated conversations and hone in on the directly related conversations.

Another opportunity for Nike would be to promote their FuelBand through the use of Instagram.  Nike itself has its own account, but the Fuelband itself does not have its own account.  This is odd because for almost all of the other social media platforms, Nike+ Fuelband had a separate account or a very focused and concentrated section within a Nike account.  On Instagram there is little activity involving the product.  Through Instagram, Nike can promote FuelBand users to show how they wear their bands, when they reach goals, and where they wear their bands.

Nike has also enticed a few celebrity endorsers such as Serena Williams and Lebron James who have both tweeted about the product and are shown wearing the product in some of their online conten.  Where the opportunity lies is in creating a competition where Nike+ FuelBand users can add celebrities and compete directly against them in the Fuel point challenge.  This is the opportunity has inspired the direct marketing campaign below.

Direct Marketing Campaign

Average people strive to be more like superstar athletes every day. Nike has many sponsored athletes who wear the Nike fuel band and can be used for a unique marketing concept. Our marketing plan has two main goals: the first is to create a newfound hype for the product and the second is to leverage low cost advertising methods that yield the greatest result.

Implementation #1 – “Pro Athlete Vs. Average Joe Social Media Campaign”

A webpage will be built that shows daily statistics of how pro athletes and NCAA players are performing each and every day which can be compared to current users. This will motivate people to train harder and add a new dimension to the fuel points metric. Friends can share via social media how their workouts compare with their favorite athletes and brag to friends and family. A leaderboard will be updated in real time to see who consistently matches their favorite athlete. These athlete superstars will be asked by Nike to tweet and comment on the Instagrams of average people who have the most fuel points. This will create hype within social networks and long term build the brand and drive revenue.

Implementation #2 – Create Nike Fuelband Instagram Page

We will create a Nike Fuelband Instagram page which has the purpose of promoting activities relating to the Nike Fuelband. Our goal is to get as many followers as possible and promote our pro-athlete comparison campaign. The handle will be @NikeFuelband. A snowball effect will occur when friends want to compete each day to match the training of their favorite athlete. We will initially promote this page to customers who have already purchased the band to build the initial community which will engage first time customers as well. Nike is historically known for creating individual segments for each product so having this Instagram is essential. A new feature that will be added to the product will be that users can share images of their Nike fuel feats and earn extra points. This will grow the Instagram page and incentivize users to grow the Instagram community.

Implementation #3 – CPA Campaign’s

Nike Fuelband has been lacking recent banner and rich media advertisements as of recent. We propose a supplemental online advertising campaign on trending websites. The most important will be NCAA.com because of the NCAA tournament that is currently taking place. Social media activity is at an all-time high due to the tournament and we see this a fit opportunity to capitalize. We want to initiate a CPA campaign with the action leading to a landing page promoting our athlete comparison function and ultimately having the user buy the Nike band. We will test market the NCAA website to see what results are yielded and then look into other potential vertical websites.

nike leaderboard

This 728×90 Leaderboard banner ad is the spot in which we will media buy for the campaign. This is the only advertisement on the page and is the first thing a user sees when they click on the page.

Sample Advertisement

When this advertisement is clicked it will send the user to a landing page with the purpose of having the customer make a purchase.

Effectiveness Testing

Key Performance Metric- Conversions

The goal of the CPA campaign is to make a sale each time the customer clicks on our advertisement. The NCAA website banner placement will be expensive real estate, but likely to have a high conversion potential due to the premium and current content of the website. We plan to have a position of an account manager hired by Nike to work with the advertising network to ensure that the campaigns are optimized by each region.

Example of Campaign Tracking and Optimization in Excel

Alexa is a web information and statistics company that tracks the quality and quantity of traffic on websites. This chart shows a sharp increase in traffic for NCAA.com, the site in which we will place our advertisements that entice users to play up to the level of NBA and NCAA stars. We will closely monitor alexa to find the best websites to media buy advertisements on.

Nike Excel

“Nike + Fuelband.” Nike.com. N.p., n.d. Web. 26 Mar. 2013.

“UP.” Jawbone.com. N.p., 26 Mar. 26. Web. 26 Mar. 2013. https://jawbone.com/up

Arnold, Rod. “How Different Age Groups Use Social Media | The Social Biz Buzz.” The             Social Biz Buzz RSS. N.p., n.d. Web. 26 Mar. 2013

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