Tag Archives: fashion

Subscription model for Nike kids’ shoes

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:

  1. Discuss the advantages and disadvantages of subscription-based services.
  2. 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).
  3. Discuss the various pricing models in class: demand-oriented, cost-oriented, profit-oriented, and competition-oriented.
  4. For Nike Adventure Club, divide students into groups and have each group work on any/all of the six steps.
  5. When setting the price level, assign each team a different model to use (demand-oriented, cost- oriented, etc.).
  6. Is the Nike program correctly priced for the target market?

Source: TechCrunch, CNN, USA Today, Reuters, other news sources

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Naming a New Brand is Tricky!

How important is naming a new brand? It is absolutely critical – and also exceedingly difficult to accomplish. Marketers have to come up with a new name that represents the product’s value and attributes, AND be attractive to customers, AND it must not be taken by another company, AND is not too common a name, AND is not offensive to any population. Whew. No wonder so many companies use made-up words as brand names.

A recent case about the perils of naming a new brand was the ‘Kimono’ shapewear brand developed by celebrity icon Kim Kardashian West. Although the branding was rigorously researched, the ‘Kimono’ name was criticized globally as being offensive and profiting from a traditional clothing article that was a cultural symbol of Japanese heritage. The name had to go, along with the Kimono Web site, logo, labels, and more. More than two million garments will need to be relabeled so that no products are wasted.

The stakes are high for the new brand. The global women’s underwear industry is valued at approximately $83.3 billion and is still growing. It is also fragmented with new comers gaining market share at the expense of older more established brands. To her credit, Kardashian West listened to criticisms and has decided to change the name prior to releasing any product. (The new name has not yet been announced.)

What’s in a name? Everything!

Group Activities and Discussion Questions:

  1. Poll students about their viewpoints on the Kimono name. Do they agree with the decision to change the name?
  2. Discuss competition: Who are the direct competitors for this product? Indirect competitors?
  3. For ‘Kimono’ put students into teams and have each team build a SWOT analysis.
    1. Strengths: What is the company good at?
    2. Weaknesses: What needs work?
    3. Opportunities: What is going on in the marketplace that is positive?
    4. Threats: What factors should the company be wary of?
  4. Put students into teams. Have each team develop a new name for the Kimono brand.
  5. Post the names on the board and vote on a winner.

Source: Wall Street Journal, New York Times, Fast Company, other news sources

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Happy 60th Birthday, Barbie!

Happy 60th birthday to Barbie!

Launched at the New York Toy Fair at a price of $3.00 way back in 1959, today’s Barbie dolls have taken new shapes, sizes, colors, and careers into their stride. While Barbie has often been criticized, the original vision for Barbie – to encourage girls to think about their futures – still holds today. The doll’s original figure (tall, busty, Caucasian) is also still around, but it has also been broadened and diversified to fit today’s girls and society.

Today’s Barbie dolls include four different body types, seven skin tones, 22 eye colors, 24 hairstyles, and an extensive wardrobe of clothes, accessories, houses, and cars. Barbie has had dozens of careers. She is not only a fashionista, she embraces careers such as actress, politicians, doctors, athletes,  artists, journalists, mountaineers, activists, astronauts, teachers, and more. There simply is no limit to what Barbie – and girls – can accomplish. Barbie is equally at home in a robotics lab as she is on a farm.

And now Barbie is also taking on gender gap in The Dream Gap Project. Beginning at age five, many girls develop limiting beliefs about themselves and what they can accomplish. By age seven, girls are more likely to think that boys are smarter than girls. Barbie is taking this on by showing role model dolls who illustrate what is possible.

What do you want to be when you grow up?

Group Activities and Discussion Questions:

  1. Discuss the product life cycle.
  2. Where does Barbie fit in the life cycle?
  3. How does the toy remain relevant?
  4. Show video of Barbie history: https://youtu.be/DXFVaYTI3uQ
  5. Show Barbie Web site: https://barbie.mattel.com/en-us/about/role-models.html?icid=home_body-2_module_role-models_p1
  6. Show the Dream Gap Project site: https://barbie.mattel.com/en-us/about/dream-gap.html
  7. Divide students into team. What else can Mattel do with Barbie?

Source: Klara, R. (25 February 2019). Here’s how much Barbie has changed since her debut almost 60 years ago.

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