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Activate Your Foot, We will Shocks you

Marketing Class Project
by

Ryota Higuchi

on 16 June 2010

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Transcript of Activate Your Foot, We will Shocks you

Activate your foot, We will "Shocks" you! Exclusive Summary Nike
New Balance
Asics Reduce injuries and provide increased performance ? "Is Running barefoot better for you?" SHOCKS maintain physical and sensory benefits of barefoot running
while eliminating the psychological and physical barriers to engaging in this activity A Brief History of Modern Minimalist Running "Members of the reclusive trive live in the Copper Canyons of north-central Mexico... routinely run hundreds of miles through the harsh, rocky desert in flimsy sandals made from strips of tire rubbers" Tarahumara, a tribe of indians who live in northern mexico The benefits of minimalist running "running barefoot is associated with a substantially lower prevalence of acute injureies of the ankle and chronic injuries of the lower leg." Michael Warburton - author of "BAREFOOTRUNNING" Market Analysis Strength and Target Market Weaknesses Opportunities Threats and Competition The goal of the "Shocks" product is to not only introduce a product that will enable runners to increase their performanc, improve their form, and reduce the occurrence of injury; but also to do so fashionably. Therefore...... The primary target market will be
casual (those who run a few times/week for fun)
and
serious runners(those who run marathons, races, etc...). only one successful competitor Vibram fivefingers NoT FASHIONABLE..... a "Glove" concept Shocks Based off of an ankle "Sock" concept
a product that protects against sharp objects but still maintains the overall sensory experience of running barefoot two barriers Psychological Physical
Traditional running shoe companies have been conditioning consumeres for almost 40 years to think that..... More Padding in a running shoe is BETTER so..... Our team's first task will be....

To Educate consumers on the benefits of minimalist running

to reassure consumers about the ability of "SHOCKS" to protect their feet

to help consumers unlearn what they have learned about padding Because most runners have been wearing traditional running shoes and apparel, their feet and muscles are not adapted and properly conditioned to minimalist running Thus..... Consumers will need to be conditioned to expect to decrease mileage and speed at first so that they can improve mileage and performance over the long haul. $5 billion a year U.S. market for running shoes and apparel The current players and competition in the foot apparel industry why? These companies have
brand awareness
economies of scale
production capacity While these competitiors are currently not addressing this niche segment successfully, that does not mean one of them will not get their act together and successfully launch a product before ours hits the market. Conclusion:
The introduction of "Shocks" has the potential to revolutionize and change the framework of the running apparel industry Marketing Research Objetives Balancing the preferences of minimalist runners while attempting to broaden the segment by appealing to the general running community Research objective will focus on the demand for minimalist foot apparel
critical features
pricing of the product Minimalist Runners Regular Shoe Runners Why not? A lack of education regarding the benefits of minimalist running?

A fear that a minimalist approach will not protect their feet as well?

A fear that they will look funny? A fact that they know they will have to scale back their running temporarily in order to adjust to the minimalist approach? Marketing Research Plan Primary Data
Secondary Data There are ample volues of secondary sources available in the form of new research studies being conducted in academia, marketing research by industry groups, as well as articles in major news pulications and magazines.
What about Primary Data? Contacting minimalist runners in forums on the internet and asking them to fill out online surveys that relate to the research objectives.

critical design
Pricing
demand components by using these information.... Our team will put together a prototype and organize some focus groups to further clarify and confirm the internet findings, as well as test the product. Finally, after testing the prototype and making changes to it based off of the feedback of the focus groups, a final focus group will be conducted to test the product that will ultimately be introduced to the market Pricing $49.99 and slowly raise the price Because a lower price will make runners more likely to give our product a try, we expect to reduce production costs over time, and we expect a low price to discourage potential competition from entering our niche market. Why not lower than $49.99? Trying to maintain a balance between a perception of low-cost leadership and a high quality brand image Expected Demand of the Product An every-day runner usually wears their shoes out in about 3-4 months and a regular runner every 6 months.
2-4 sales/year Given the relative infrequency of the purchases,
we expect consumers to be somewhat price sensitive Means:
He/she is likely to realize that the cost is to buy a new pair!!!!! LESS THAN A DOLLAR PER DAY Potential Consumer Reference Prices and Competitors' Prices Vibram FiveFingers $75~$125 The more functional and multi-purpose the footwear is, the more expensive it is In other words,
the less functional purposes a foot product has,
the lower the price is Regular shoes $50~$200 DISTRIBUTION Level 0 (selling directly to the consumer through the internet)
Level 1 (selling through a retailer) While Specialty athletic footwear stores claim only 10% of the market, this is the Level 1 channel where the product is most likely to gain traction early on as these stores and Shocks have similar target markets As brand awareness grows and the product becomes more popular.... Full-line sporting goods stores
=14% of running shoe sales Thus... While the introduction phase will be focused exclusively on Shocks' target market,
the growth phase will begin to attempt to expand the target market and appeal to more consumers Maturity Phase Intesive numbre of intermediaries Add department store to the mix
as they represent roughly 21% of all running shoe sales Include Level 2 and possibly Level 3 distributionchannels in order to sell its apparel through independent distributors, licensees and subsidiaries Global internet
Retail
specialty
independent distributors
licensees
subsidiaries
department stores (Macy's, Dillards) The Marketing Communication Mix Intended Market: The Avid Runner direct marketing
advertising
word-of-mouth
sales promotion
events and experiences
public relations and publicity
interactive marketing BRAND AWARENESS and also efiiciently convey the benefits of our product to our target audience in a cost effective manner such that consumers give Shocks a trial run and ultimately adopt it 1. Website and Facebook page for Shocks interactive marketing tools such as online forums to discuss the product and give review but also to start a and word-of-mouth sales promotion campaign The cost of implementing such a program is minimal, and its potential to reach a large number of our target market is considerable 2. Sponsoring races and fun runs around the country with a focus on those events that are supporting charitable causes conjunction with such as the American Cancer Society throughout the country, each with a focus on a particular type of cancer To reach our target audience and build a positive image for the brand. In addition, local media such as television and radio stations often cover these events so there is the possibility for additional ancillary contact with a broader audience. 3. Advertisements in running magazines
and runner oriented websites.
Online advertising through internet
solutions companies such as Weblinx. Why not TV? Since our product is a niche product, it is unlikely that we will engage in nationwide television or radio advertising as the audience is too broad and air time too costly. However, we are open to re-evaluat this strategy
if competitive pressures warrant or our audience widens Also.... Contacting famous runners for sponsorship and spokesperson opportunities.
Ideally, will place highly in running competitions wearing our product and promote it in our magazine and online advertisement Advertising Budget 10-15% of revenues Nike: 12.4% of revenue We will focus mostly on

Word-of-mouth combined with sales promotion
Events combined with publicity

and possibly expand into traditional advertising as our revenues grow.
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