MMS712 Deakin University: Nike Fuelband, Sports Marketing Analysis

This case study analyzes Nike's Fuelband, launched in 2012, focusing on its sports marketing strategies and integration of the fitness concept. It explores how Nike leveraged fitness trends in the product's design and its fit within Nike's existing product portfolio. The report examines the market size, scope, and global expansion opportunities for Fuelband, highlighting its connection to the Nike+ product line. It also addresses challenges faced by Nike, including software maintenance and the eventual discontinuation of the product, which impacted the company's brand image. The analysis concludes with a discussion of key questions regarding the case study, reflecting on marketing effectiveness, product lifecycle management, and brand reputation.

Running head: SPORTS MARKETING
Sports Marketing
Name of the Student:
Name of the University:
Author’s Note:

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Executive Summary
The report will discuss about the concept of marketing in the sports industry and for this
purpose the report will analyze the Fuelbands launched the company Nike in the year 2012 in
USA. The report will begin by introducing the company Nike and the product which it
launched in the year 2012, namely Fuelbands. The report will also focus on the manner in
which the concerned company took the help of the theme of fitness to design the attributes of
the product under discussion here and also the manner in which fits into the cannon of other
existing product portfolio of the company. Furthermore it will discuss about the size and the
scope of the market which the product can explore and also the global expansion options
which galore it. The report will also try to show the manner in which the Fuelbands are
extension of the Nike+ products offered by the same company. Finally, the report will end
with a discussion of three questions which have been formed by the author on the basis of the
case study under discussion here.

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Table of Contents
Introduction................................................................................................................................3
Nike and the Fuelband...............................................................................................................4
Fuelband and the idea of Fitness................................................................................................6
Fuelband and Nike’s existing portfolio......................................................................................8
Size and Scope of Fuelband.......................................................................................................9
Fuelbands and Global Expansion.............................................................................................12
New Product Extension............................................................................................................12
Fuelbands and marketing.........................................................................................................13
Conclusion................................................................................................................................13
Case study Questions...............................................................................................................14
Question 1............................................................................................................................14
Question 2............................................................................................................................15
Question 3............................................................................................................................16
References................................................................................................................................17

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Introduction
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

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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.
Nike and the Fuelband
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,

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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

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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).
Fuelband and the idea of Fitness
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

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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.,

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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.
Fuelband and Nike’s existing portfolio
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

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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.
Size and Scope of Fuelband
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-

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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).

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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).