Situational Analysis of Nike Fuel Band - Essay Example

? Situational Analysis of Nike Fuel Band Situational Analysis of Nike Fuel Band Product The Nike Fuel Band is a gadget that is worn on the wrist, and it functions to track one’s activities throughout the day, even helping its wearer to do or achieve more. The wristband has a design that is streamlined having LED display. The display is bright (red-to-green) and gives a person’s progress as they head toward their goal all day long. The band has four modes of display, which are the amount of Nike Fuel earned, number of steps taken, time lapsed, and amount of calories burnt. Nike Fuel Bands are easy to set up as well as use, and they come in three sizes (the small, the medium or large, and the extra-large). Another feature on the wristband is a size space, which enables it to fit best. This product is also resistant to water and enjoys a long battery life (could go even for seven days) (Bergh & Behrer, 2013). Nike Fuel Band has an added advantage in the sense that it comes with a free mobile application (Nike+ Fuel Band). With this application, a person is able to track progress made, turning the movement tracked into Nike Fuel points. This can be synchronized using Bluetooth wireless to view results, the high points during the day, the achievements or trophies gained, and general progress made. In summary, the Nike Fuel Band tells a person how active they are and motivates any person who desires to increase their level of activity (Bergh & Behrer, 2013). Company Description Nike Fuel Band is an exclusive product of Nike, Inc. This is a corporation that is multinational and of American origin. Nike, Inc. can be rightfully termed as the leading innovator in the world when it comes to athletic footwear, equipment, apparel, and accessories. The company designs, also develops, sells, and markets its products and services throughout the world. The Nike, Inc. company has its headquarters in the county of Washington, Oregon (close to Beaverton), in the United States of America. When it was founded, it went by the name Blue Ribbon Sports. This was on 25th of January, the year 1964 by two men who were visionary and dared to be pioneers of the athletic footwear revolution. The men who brought this redefinition to the industry were Phil Knight and Bill Bowerman. The company became known as Nike, Inc. officially on 30 May 1971. The Nike acronym is taken from a Greek mythology and was ascribed to the goddess of victory (Bergh & Behrer, 2013). Nike, Inc. as a company has what it believes in and this is that any person, who has a body, can become an athlete. This underpins the company’s vision of promoting mobility, comfort, and style through its gear as a whole (footwear, accessories, equipment, and apparel). The mission statement of the company is encapsulated in bringing inspiration as well as innovation to each athlete all over the world. This commitment is evident in the new and extremely innovative methods that Nike, Inc. is using in development of athletic products that are superior (Moe & Grahn, 2012). The company also uses methods that are very creative when it comes to direct communication with consumers. Nike, Inc. has experienced dynamic expansion that includes growing strongly in China. Product Life Cycle The Product Life Cycle (PLC) is the life span of a certain product. Product Life Cycle is a theory, which has its basis on the way a product evolves. This movement takes place in four steps that are from start to the end. The first step in the process of Product Life Cycle is the introduction of a product, and then moves to the stage of growth, maturity stage follows, and finally there is a decline in the sales of the product. This information is usually displayed in a Product Life Cycle Curve, which depicts the level of sales of a product against time (different phases). The Nike Fuel Band is in the growth stage of the Product Life Cycle. This is evidenced by its presence in the market and exponential growth of its sales since being introduced into the market almost 2 years ago (Lord & Velez, 2013). Despite the stiff competition Nike Fuel Band is facing from other brands, it is still the one in highest demand. The reason for this is that people have come to associate Nike, Inc. products with the quantified self and fitness. Therefore, in this stage of growth, Nike, Inc. has stuck to its premium prices and the Nike Fuel Band is seen as a product that is superior to the competitors in the market (Lord & Velez, 2013). Development and research are the aspects in which the company is growing primarily. This new technology has helped Nike to capture the attention of consumers. Sales History and Market Share The Nike Fuel Band is about 20 months old in the market of a business referred to as wearable computing or technology. This product has been a huge success in the market and it retails at only 149 US Dollars. Nike Fuel Band is an equipment division of Nike, Inc. and it registered a loss of 1% in the fiscal year 2011. The product registered massive sales in the fiscal year 2012 resulting in an 18% increase in profits (Moe & Grahn, 2012). This was when the Nike+ Fuel Band was introduced and sold online through pre-order. It has even been sold at nearly double its price (retail) online on eBay in the first few months following the end of placing pre-orders. The Nike Fuel Band whose availability registered only online to begin with (January 19, 2012) is a force to reckon with in the wearable technology industry. To begin with, it has competitive prices and reliable goodwill of the mother company Nike, Inc. This has given Nike Fuel Band an edge over competition such as Fitbit Force, Jawbone Up, and Withings Pulse. This has translated in Nike Fuel Band getting a larger market share. The members of the community who use Nike Fuel Band have reached up to around 20 million (Bergh & Behrer, 2013). In order to enjoy the bigger share of the market, Nike Fuel Band differentiates itself from competitor brands of wearable technology by developing technology that has its focus on athletes. This makes Nike, Inc. products appealing to the market earning it the lion’s share. Consumer Purchase Processes The target market for Nike Fuel Band is mainly individuals who are athletic and who have disposable income that ranges from medium to high. These are young adults mostly and can make quick decisions purchase this product since financially they are independent (Issa, Isaias, & Kommers, 2013). They have high usage of technology and the internet and most likely purchase products (including Nike Fuel Band) online (Nike.com). This is done using gadgets such as smartphones, tablets, and computers. The Nike Fuel Band may as well be purchased at the various Nike retail stores, Apple.com, Apple retail stores. The price point for one piece is $149 with a choice from a range of sizes and colors. External Demand Factors Consumer tastes and preferences – change in tastes and preferences of consumers may lead to decreased or increased demand thus the highly interactive kind of advertising by Nike, Inc. of its products in order to weigh customer satisfaction and adjust where necessary. All this is geared towards increasing demand. Demographic – The target market for Nike Fuel Band is the youth who make up the larger portion of the working class conscious of their health thus demand is most likely to be high. As this population increases so does the demand. Economic – This gadget is not very cheap and can only be bought by those with a healthy disposable income making its demand become quite low. The demand for Nike Fuel Band is negatively affected by use and need of sophisticated gadgets such as iPhones and tablets. These are not affordable to many people (Issa, Isaias, & Kommers, 2013). Natural – This factor considers changes in climate, which affects demand of goods, and services of which the Nike Fuel Band is not affected. Technological – the use of Bluetooth technology in synchronizing data with other devices such as laptops or smart phones makes it appealing to a tech savvy generation raising its demand (Pasqua & Elkin, 2012). Political/Legal – stipulated government regulations concerning product quality and service delivery should be complied with in order to affect demand positively. Social/Cultural – The product should meet certain social/cultural criterion by which demand varies. For the Nike Fuel Band, it is more likely to appeal to the upper mid class and the high class as opposed to the lower class. Competitors – they pose a challenge in terms of creating the need to continually innovate but still all features considered, the Nike Fuel Band is still ahead (better) than its competitors in terms of prices and quality thus securing good demand. Substitute products – they are the ones that are capable of replacing another good’s or service’s want. A rise in price in one, leads to rise in demand for the other. References Bergh, J. and Behrer, M. (2013). How cool brands stay hot. London: Kogan Page Issa, T., Isaias, P. and Kommers, P. (2013). Information systems and technology for organizations in a networked society. Hershey, PA: Business Science Reference Lord, B. and Velez, R. (2013). Converge. Hoboken, New Jersey: John Wiley & Sons, Inc Moe, H. and Grahn, L. (2012). Party marketing. London: LID Pasqua, R. and Elkin, N. (2012). Mobile Marketing. 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