Subscription services can be a great business model. It gives businesses a monthly recurring revenue stream that is steady and predictable – at least until the consumer ends it. Many subscription services have had initial success, only to lose subscribers as time goes on and subscribers no longer see the value of the service.
The meal subscriptions have been particularly hard hit as customers try various plans, only to eventually stop. There are also a great number of clothing subscription services, including subscriptions for fashion clothing, business apparel, and athletic wear. Now, Nike is launching a new subscription service aimed directly at the kids’ shoes market. It’s an important market space and is valued at roughly $10 billion annually.
Nike will offer three levels of subscriptions: $20, $30, or $50. At $20/month, customers get four new pairs of shoes and play activities; $30/month gets 6 pairs; $50/month gets 12 pairs. Named ‘Nike Adventure Club’, the service is aimed at 2-10 year olds and supplies Nike and Converse shoes. Is it money saving for consumers? Perhaps. It depends on the level of shoe selected. The main goal of the service is to build relationships and maintain brand loyalty for Nike and Converse.
As for correct shoe sizing, Nike includes a sizing chart to help parents measure their child’s feet. In a pilot program run with 10,000 members, only a small percentage of parents had the wrong size. The service includes free shipping and returns along with free size and style exchanges.
Ready to play?
Group Activities and Discussion Questions:
Discuss the advantages and disadvantages of subscription-based services.
Pricing is usually a complex topic. Discuss the six steps for pricing (determining objectives, estimating demand, determining cost/profit relationships, select price level, set list price, and make adjustments).
Discuss the various pricing models in class: demand-oriented, cost-oriented, profit-oriented, and competition-oriented.
For Nike Adventure Club, divide students into groups and have each group work on any/all of the six steps.
When setting the price level, assign each team a different model to use (demand-oriented, cost- oriented, etc.).
Is the Nike program correctly priced for the target market?
Source: TechCrunch, CNN, USA Today, Reuters, other news sources
It is summer and we crave ice cream. Perhaps you are an ice cream addict. Perhaps you have tried virtually hundreds of flavors over the years. But, have you ever tried ‘mustard ice cream’? How have we lived without this flavor?
It’s not as strange as one might think. After all, there have been other crazy flavors of ice cream over the years: goat cheese ice cream, cilantro lime ice cream, curry and mint ice cream, sweet corn ice cream, lavender honey, and many more! And before you ask, yes, there is a ketchup-flavored ice cream which was created in honor of musician Ed Sheeran (who sports a ketchup tattoo), but it appears to only be available in Ireland.
The mustard ice cream was created by French’s and Coolhaus Ice Cream to celebrate National Mustard Day on August 3rd. Unfortunately for all the mustard fans, the ice cream had a limited run of only a few days in New York and California locations. But, there is still good news – the recipe is available online for home chefs. The tart concoction is best served with a pretzel cookie to compliment the flavor.
Race you to the freezer!
P.S. Look at the fine print at the bottom of the container!
Privacy. It is such a critical topic, yet it is also one that many consumers feel helpless about fixing. Who knows what we buy? What we want? Where we go? Well, as it turns out there a great number of companies, and government agencies, tracking us. And it is not limited to our purchasing behavior. There are a number of companies that can and do track the daily activities of employees also.
Everyone says they want privacy, but many people are unwilling or don’t know how to protect their online privacy. The issue is one that reaches beyond the individual and extends to the larger society. It encompasses devices including home security, smart phones, wearable devices, facial recognition, home speakers, smart TVs, automobiles, maps, social media, and more! And the crazy thing is that we often give permission to be tracked without realizing the implications to our privacy.
This is an issue that extends beyond consumer behavior and can also encompass how companies track employee behavior, beginning when we wake up and check our work email at home, and continuing monitoring activities throughout the day to track physical and online movement. Granted, some of the tracking is useful to protect against espionage and theft, but does it go too far?
Who’s watching who do what?
Group Activities and Discussion Questions:
Discuss the issue of privacy in the Internet age. What are students’ concerns?
There are several very compelling interactive graphics and videos that help illustrate this topic. Show these in class and have students take notes on each.
Discussion: Is privacy important? What can be done to protect individuals?
Consider assigning students to research this topic. A number of interesting reports can be found at various sources.
Source: Bentley, E. and Krouse, S. (19 July 2019). Meet ‘Chet.’ His employer knows what time he woke up today. Wall Street Journal; Manjoo, J. (11 April 2019). It’s time to panic about privacy. New York Times.