Nike FuelBand: Did the Brand Score a Goal?
Nov 25, 2013
Nike’s FuelBand activity tracker is one of the company’s hottest sellers ever. Not only did the product sell out online pre-orders in one day twice, but at one point the eBay price was double the suggested retail price. Last year, Nike’s profits leaped 18%, largely bcause of FuelBand — a big turnaround from the 1% year-earlier decline.
Nike introduced the new FuelBand SE this month for $149. Like competitors Fitbit Force and Jawbone, the FuelBand tracks activities such as steps taken, stairs climbed and calories burned. Many users strive to hit fitness goals, notably the 10,000 steps a day recommended by the American Heart Association. Friendly competitions arise among family and friends as these products connect to computers and smartphones to display progress graphically.
So what were some of the marketing elements leading to the success of the FuelBand? To find out, Knowledge@Wharton asked three Wharton marketing professors: Peter Fader, Barbara E. Kahn and David Bell. The three are team-teaching a free online course through Coursera titled, “An Introduction to Marketing,” and their comments here tie into the course modules.
An edited transcript of the conversation appears below.
Kahn on branding:
Knowledge@Wharton: What is product-focused marketing, and how does that relate to the early strategy for the Nike FuelBand?
Barbara E. Kahn: If you think of a market as between a seller and a buyer, on one extreme there is a seller’s market, and on the other extreme there is a buyer’s market. In a seller’s market, if you want the product, you have to go to [the sellers]. That gives them a lot of power in that exchange. Under those circumstances, people tend to do what is called product-focused marketing…. Since you are going to come to [the seller] if you want the product, I [as the seller] work on developing a good product. I work on reducing cost. And I am very much concerned with selling my product. Read more of this post
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