Brand Building with Location

November 16, 2010  |  By Michael O'Shea  |       

Summary: The press release from Nike earlier this month serves as an interesting example of the potential that exists for established companies to help build their brands using location-based experiences.

Nike is in the midst of relaunching its Nike+ brand and product line. The product which was originally launched in mid-2006 with the original iPod kit, had gone fairly dormant over the past year and half after a notable entry into the market with then-partner Apple. The latest iteration from Nike, drops the preipheral shoe sensor entirely, leveraging the GPS and accelerometer functionality with the iPhone. The core of the application in tracking and training. Using the GPS and accelerometer data, the device maps your run and stores it for later reference and performance tracking. Layered on top of the location-based data is a handful of other engaging features, such as social links to share runs and goal and integration with with iPod. The app retails for only $1.99 - much less than the “competitive” set. With this latest addition to the app store, Nike now supports eight different applications in the U.S. Apple App Store alone - most of which are free.

Is Nike embarking on a new business line and assuming the role of a developer with its product entries on the app stores? The application certainly competes with the likes of RunKeeper and Runmeter. And with nearly 50% market share in the footwear market, it is likely that Nike+ will witness strong adoption over its rivals currently in the store. However, its aspirations clearly go beyond that of competing in the appplication retail space as the brand furthers its message and reach in a new medium that supports Nike’s marketing efforts.

We wanted to highlight the Nike news for a few reasons.

  1. Utility: The cornerstone of the application provides enormous utility to the target market. This location-based application, has true relevance to the user, keeping them further engaged with the brand. Without building such utility, the “marketing” opportunity does not exist.
  3. Expansion: The product itself is not core to their business. While it could be argued that Nike’s business is not footwear, equipment and apparel - but rather that they are selling performance per se, it is likely that Nike had to expand its capabilities to support this area. As such, it is notable that a brand such as Nike is investing in its ability to deliver digital products and that have both revenue and marketings impacts.
  5. Branding: Versus the typical motivation for a dedicated app developer (profit) the benefit to Nike goes beyond the immedicacy of the revenues generated by the application itself. The user is further immersed in the brand within the context of a relevant digital product that also has the secondary benefit of brand building.
  7. Social Links: Nike has given the user the tools to broadcast their performance, the application and, in parallel, the brand to the user’s entire social network.

There are many such marketing opportunities in the application store for brands that want to increase brand interactions in a meaningful, relevant manner that is linked to their core business. Using location as the cornerstone for the experience Nike has built a usefull quality application that keeps their target market immersed in the brand while providing opportunities to broadcast the brand further outside of the app.

Topics: Product Updates/Announcements

Michael O'Shea

Michael O’Shea is the Founder and CEO of Abalta Technologies. He is responsible for all aspects of executive management of Abalta and a direct participant in many client engagements, particularly in management advisory projects.

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