00:00:09
so product Focus marketing is what
00:00:11
happens if you think of a market as
00:00:12
between a seller and a buyer and you
00:00:15
think of one extreme there's a sellers
00:00:17
Market in The Other Extreme there's a
00:00:18
buyer's market in a sellers Market if
00:00:21
you want the product you have to go to
00:00:23
them so that gives them a lot of power
00:00:25
in that exchange and under those
00:00:27
circumstances people tend to do what's
00:00:29
called product focused marketing and
00:00:31
what that basically is since you're
00:00:33
going to come to me if I want the
00:00:35
product I work on developing a good
00:00:37
product I I work on reducing costs and
00:00:39
I'm very much um concerned with selling
00:00:42
my product when Nike fuel band first
00:00:44
came out this is a Nike fuel band I had
00:00:46
one of the early ones and this is one of
00:00:47
the first generation ones um since there
00:00:50
was no not much else in the marketplace
00:00:53
then they could really focus on the
00:00:54
unique features I didn't really consider
00:00:56
anything else I bought a Nike fuel band
00:00:59
because I want wanted something that
00:01:00
monitored my calories my steps my energy
00:01:04
Etc and there really wasn't very much
00:01:05
choice so that's product Focus
00:01:12
marketing what happens is again we're
00:01:14
thinking about the exchange between the
00:01:15
buyers and sellers as more competition
00:01:18
comes in as there are other substitutes
00:01:20
then buyers have more choice and in that
00:01:23
case when the when the marketer wants
00:01:24
you to buy from them rather than from
00:01:26
the competition they have to start
00:01:28
focusing on what you want and so then it
00:01:30
becomes a customer focused Market well
00:01:32
this is the second generation I don't
00:01:34
have it yet but the second generation of
00:01:36
the Nike fuel band really focus on the
00:01:38
way the customers were using the product
00:01:40
Less on the way Nike thought it should
00:01:42
be used so actually one of the things
00:01:44
that's different first of all there's
00:01:45
color in it so they come out with
00:01:47
different colors well vault is the new
00:01:49
yellow color so it's kind of sexy color
00:01:51
the other thing I think is really
00:01:52
interesting is a lot of people were
00:01:54
using this Fuel band you you don't want
00:01:56
to have that many things lining up on
00:01:57
your wrist and so one of the things that
00:01:59
Fuel band did almost as an afterthought
00:02:02
was to tell the time well it turns out
00:02:04
because people didn't want to have so
00:02:05
many things lining up on their wrist
00:02:07
they were using the F fuel brand as time
00:02:10
but in order to get the time in the
00:02:11
original version you got to like psych
00:02:13
oh I passed my goal you got to uh cycle
00:02:16
through all the different things look
00:02:19
how long it's taking me and now I can
00:02:21
tell you the time the new version you
00:02:24
just double click it and the time comes
00:02:25
out right away that's more C customer
00:02:28
focus it's giving the customers what
00:02:29
they want and giving them a reason to
00:02:31
buy this over the
00:02:37
competition so if you're looking through
00:02:39
these trends of marketing product focus
00:02:41
when there isn't a lot of competition
00:02:43
Market gets more competitive and then
00:02:45
you start being customer focused what's
00:02:47
happened in the last say 10 years is
00:02:49
we've got a connected Community now and
00:02:51
there's social media there's the
00:02:53
internet there's well what's interesting
00:02:55
about this product is every day you can
00:02:57
upload your data to the internet and you
00:03:00
can keep track of it that way because it
00:03:01
doesn't hold that much data on each
00:03:03
thing so you can keep a long record I've
00:03:05
had my record now for about six months
00:03:07
what I've done in addition I can
00:03:10
interact with my friends who also have
00:03:12
Nike fuel ban or I can interact with
00:03:14
them on Facebook and we can share data
00:03:17
and I can tell my friend when she's
00:03:18
being really lazy move it you're too
00:03:20
slow you know and she can tell me when
00:03:22
I'm doing well so we have this whole
00:03:24
connected community and I think over
00:03:26
time the power for Nike behind the fuel
00:03:29
band is going to be the data and once
00:03:31
they can get that connected to your
00:03:32
Facebook activity connected to other
00:03:34
things that they can tell about it they
00:03:36
can start really marketing different
00:03:38
kinds of products to you um and
00:03:40
increased customer share and share of
00:03:42
wallet well once you know like how I use
00:03:44
the product you might be able to Market
00:03:46
shoes to me on that you know Market
00:03:48
certain kinds of clothing if you can
00:03:51
upload my data with my Facebook data
00:03:53
you'll know like well I'm using this in
00:03:55
New York or I'm using it in San
00:03:57
Francisco or something like that or you
00:03:58
can see who my friends are and can
00:04:00
connect my friend then you can mark it
00:04:02
to my friends and things like that so
00:04:04
once you have that data if you figure I
00:04:06
now have your internet data I have your
00:04:08
offline data I now have they know how
00:04:10
many calories I'm burning they know when
00:04:13
I'm doing these kinds of things you link
00:04:14
all those data together and you have a
00:04:16
really pretty big picture of your
00:04:18
consumer um and it seems like there's a
00:04:20
lot of opportunity to try to add
00:04:22
customer value by understanding exactly
00:04:24
what you want and where you
00:04:28
are
00:04:30
these activity trackers or electronic
00:04:32
Fitness bands or whatever you want to
00:04:34
call them are actually a great example
00:04:36
or great opportunity for customer
00:04:38
centricity and action part of it is the
00:04:40
data which which we can talk about
00:04:42
separately but part of it is it gives a
00:04:44
a a company a chance to really surround
00:04:47
its valuable customers with a variety of
00:04:49
product services and information and to
00:04:51
use that information to figure out which
00:04:54
kinds of products and services to
00:04:56
deliver up to the right kinds of
00:04:57
customer so it recognizes that customers
00:05:00
are all different from each other it
00:05:01
recognizes that what they're doing how
00:05:03
they're moving around can interplay with
00:05:06
uh what other uh uh behaviors they have
00:05:09
what they eat what kinds of exercises
00:05:11
they do where they live what their
00:05:13
lifestyle is so so it gives the company
00:05:15
a chance to really better understand a
00:05:17
customer not necessarily the the
00:05:20
specific details of their heart rate and
00:05:23
so on but just a a better picture that
00:05:26
they couldn't get any other way it's
00:05:27
it's hard to say how much of this data
00:05:29
is actually being stored and used by the
00:05:31
companies because the data is going
00:05:33
someplace where it can be seen not only
00:05:36
by the user but by other people so for
00:05:38
instance in the case of of the Nike fuel
00:05:40
band uh that it becomes social fund that
00:05:43
I could see my friends activities and
00:05:45
compared to mine so the data is
00:05:47
definitely being stored somewhere but of
00:05:49
course the user has a lot of control
00:05:50
over it one of the other great
00:05:52
opportunities with these electronic
00:05:54
gadgets is that it lets companies that
00:05:56
Beyond those that are already in this
00:05:58
space it gives them an Entre point to
00:06:00
deal with customers in a new and
00:06:02
different way so for instance I can see
00:06:04
a big pharmaceutical firm giving these
00:06:07
bands out giving them to people giving
00:06:09
them a service as a way to understand
00:06:11
what they're doing and not necessarily
00:06:12
to try to push pills on them but uh all
00:06:15
the Pharma firms are talking about
00:06:17
customer centricity they recognize that
00:06:18
they need to understand their customers
00:06:21
more than just developing new drugs and
00:06:23
hoping that people are going to buy them
00:06:25
so it does create new kinds of business
00:06:27
opportunities and I can see lots of
00:06:29
different kinds of firms besides Pharma
00:06:31
getting into the space as
00:06:36
well all the data that's being collected
00:06:39
by these electronic Fitness bands it's a
00:06:42
blessing and a curse on one hand it adds
00:06:44
to the whole idea of Big Data it gives
00:06:46
us all kinds of of of columns in a
00:06:49
database all kinds of observations that
00:06:51
we didn't have before in fact we
00:06:52
couldn't have even dreamed of a few
00:06:54
years ago so on one hand all of the
00:06:56
challenges and opportunities associated
00:06:59
with with Big Data uh are associated
00:07:01
with with these new kinds of data
00:07:03
structures but there are opportunities
00:07:05
there as well and if we can triangulate
00:07:08
someone's purchasing habits with their
00:07:10
media consumption with their exercise
00:07:12
activities with their sleep habits and
00:07:15
so on we can get a more complete picture
00:07:18
about who does what I'm not saying that
00:07:20
this kind of information will transform
00:07:23
our understanding of customer behavior
00:07:24
I'm not saying that it will contribute
00:07:26
significantly to our estimates of
00:07:28
customer life time value but it can't
00:07:30
hurt and it's so new and it's so
00:07:33
different it's hard to say just how much
00:07:35
incremental contribution it will have so
00:07:38
it'll be great to see that we understand
00:07:40
what kinds of statistical methods we'd
00:07:41
want to use but the results the impact
00:07:44
of this these new data sources is
00:07:46
something that the the future
00:07:48
Generations will tell
00:07:52
us we're just barely getting started
00:07:55
with with these uh new electronic
00:07:58
Fitness bands uh I think there's a lot
00:08:00
of people today who are are messing
00:08:02
around with them they're trying them out
00:08:03
sometimes
00:08:04
unsuccessfully uh it's not clear what
00:08:06
they're doing with the data or how
00:08:08
they're sharing it what uh what what
00:08:10
companies are doing with the data but I
00:08:12
see this as more of a generational kind
00:08:14
of issue uh I imagine that the Next
00:08:17
Generation we start putting these these
00:08:20
Fitness bands on our children when
00:08:23
they're not even a year old it'll just
00:08:25
be uh something that we want to monitor
00:08:27
all the time obviously for different
00:08:29
reasons when they're infants or toddlers
00:08:31
than when they're adults but people are
00:08:33
going to be used to wearing these things
00:08:34
they're going to be used to using the
00:08:37
data the the whole idea of the
00:08:38
Quantified Self a concept that a lot of
00:08:41
people are talking about today it tends
00:08:43
to apply more to grown-ups can I look at
00:08:45
myself and my exercise and my nutrition
00:08:48
and all kinds of habits but when the
00:08:50
Quantified Self Works its way down to
00:08:52
one and two year olds and when they're
00:08:54
accustomed to doing it when they start
00:08:56
tying in their exercise activities with
00:08:58
their social media usage and and and
00:09:01
their their schoolwork and so on we're
00:09:03
going to get just a much more complete
00:09:05
picture about individuals now on one
00:09:07
hand that can be a bit creepy it can be
00:09:09
a bit intrusive it might be a bit too
00:09:11
much A lot of that data might be useless
00:09:13
but it's going to be a new era and the
00:09:15
idea of people managing their own data
00:09:17
figuring out what the value of that data
00:09:19
is to themselves and maybe economically
00:09:22
a lot of folks are talking about that a
00:09:23
lot of companies are developing new
00:09:25
business models around that idea but I
00:09:27
think that these gadgets these armbands
00:09:29
that people are wearing is going to be
00:09:31
the major breakthrough to let people
00:09:34
understand the value of their data uh
00:09:36
and uh and I think these business models
00:09:38
will take off as a result of these these
00:09:41
gadgets moving their way down to
00:09:46
Children Well I think the really
00:09:47
interesting thing about the Nike fuel
00:09:49
band is it potentially appeals to a very
00:09:51
very wide range of users everybody from
00:09:53
kind of the serious athlete who's
00:09:55
interested really monitoring what's
00:09:57
going on with their body to the
00:09:58
so-called uh weekend warrior maybe
00:10:00
people like you and Ice Steve who like
00:10:02
to play a bit of tennis a bit of
00:10:03
basketball this and that here and there
00:10:05
so it's potentially a very very wide
00:10:07
group I think it also cuts across all of
00:10:09
the traditional segmentation variables
00:10:11
like gender it's both for men and for
00:10:13
women uh cuts across various age groups
00:10:15
various socioeconomic brackets so this
00:10:18
is a product I think if marketed
00:10:19
effectively uh potentially has a very
00:10:22
very wide Target group and a number of
00:10:24
segments within
00:10:28
that
00:10:30
so as we've been discussing Steve in our
00:10:32
other sessions pricing is a very very
00:10:34
difficult thing to get right because the
00:10:36
price has to be something obviously that
00:10:37
makes sufficient margin for the firm uh
00:10:40
the price also has to be uh fair and
00:10:42
relevant relative to the competition or
00:10:44
whatever those other points of
00:10:46
comparison and products are and it also
00:10:48
has to be something that the customer uh
00:10:49
feels comfortable with so I think 149 is
00:10:52
a price that's sufficiently high that I
00:10:54
don't just feel that like this is a
00:10:55
cheap piece of plastic around my wrist
00:10:57
it's something that really has Tech
00:10:59
technology uh embedded in it that's a a
00:11:02
good product and an interesting product
00:11:04
um it's not so high that it's going to
00:11:05
be completely inaccessible but the point
00:11:07
of comparison is very very interesting
00:11:09
is this like a $50 monitor uh that would
00:11:11
monitor my heart clearly it does a
00:11:13
little bit more than that so I don't
00:11:14
want that point of comparison is it a
00:11:16
new sort of piece of technology like an
00:11:18
iPod or an iPad or an iPhone something
00:11:21
that we're all used to sort of carrying
00:11:22
around but it's kind of related to those
00:11:25
because it has a USB connection where I
00:11:27
get the data feed so I think it's really
00:11:29
um interesting from a pricing point of
00:11:31
view of how you use all of those things
00:11:33
that we discussed to communicate this
00:11:35
value of course it ends in a nine so
00:11:37
it's sort of Cheaper Than 150 in some
00:11:39
sense but it doesn't overly cheapen the
00:11:41
product so those are all the various
00:11:43
elements that presumably Nike thought
00:11:44
about when they set the price you know
00:11:46
here's the cost here's the willingness
00:11:48
to pay what's the right comparison in
00:11:50
terms of the competition and then also
00:11:52
the other things that affect fairness in
00:11:54
the channel and so of course you want to
00:11:56
take into account what the various
00:11:57
competitors are doing and what the early
00:11:59
products like the Fitbit and so on in
00:12:01
this category were and also what might
00:12:02
be coming next so how could one then as
00:12:05
has been done with other products in in
00:12:07
this General class um add to the product
00:12:10
line through different colors different
00:12:12
Technologies maybe different levels of
00:12:14
service in terms of data feed so this is
00:12:16
also a product where we might start to
00:12:18
see that kind of differentiation coming
00:12:19
through
00:12:23
too so I think this is a really
00:12:26
interesting question so again when we
00:12:27
discussed in the ear course era segment
00:12:30
about um the way one communicates and
00:12:33
the way one designs a message and the 7M
00:12:35
of uh marketing communication one of the
00:12:37
key issues around the message is should
00:12:39
the message have a rational appeal or
00:12:41
should it have an emotional appeal and
00:12:42
of course it depends on the kind of
00:12:44
product now emotion's important here
00:12:46
because Nike has this notion you know
00:12:48
that anyone who has a body really is an
00:12:50
athlete we're all athletes in some sense
00:12:52
and so we should be doing the best that
00:12:54
we can with our bodies all the way from
00:12:56
we think of the early campaigns of Nike
00:12:58
you know just do it be like Mike it's
00:13:00
very very aspirational it kind of gets
00:13:02
you to think about the power of getting
00:13:04
in better shape the way you're going to
00:13:05
feel the way others are going to
00:13:07
perceive you so it's much much more
00:13:09
important I think uh to have that kind
00:13:11
of messaging to really resonate with the
00:13:13
customers than a messaging that's you
00:13:15
know count the number of steps that
00:13:17
you're doing this is the technology this
00:13:18
is how we feed it so I think this is a
00:13:20
classic case of a product where the
00:13:22
product itself is based on really
00:13:24
interesting technology but the way that
00:13:26
you Market it and you communicate it is
00:13:28
actually through things that that appeal
00:13:30
to the heartstrings that really kind of
00:13:31
tug at you in terms of the emotion and
00:13:33
of course that's going to be a much more
00:13:35
successful barrier to Future entrance in
00:13:38
this category than if it were just
00:13:39
purely a play based on technology
00:13:41
because then when the next player comes
00:13:43
in with a better technology uh the point
00:13:45
of comparison may be eroded but it's
00:13:47
probably going to be difficult to come
00:13:49
up with a better messaging than you know
00:13:51
anyone who has a body as an athlete I
00:13:52
think that's that's what's really key
00:13:57
here
