6 Things That Went Wrong With GoPro [ With 3 Solutions ]
In my last article, I explained to you the secrets behind the marketing strategies of GoPro & how brilliantly it markets its brand through UGC (User Generated Content). You learned about how it sells a lifestyle of adventure, passions and life-moments rather than the small square cameras themselves.
W..wait, aren’t able to catch up here with me? Does all of this look alien to you? You might want to read GoPro : It's not a Camera, It's Versatile Storytelling before proceeding further. Come back soon after reading it !
GoPro had a classic entrepreneurial start when it’s charismatic CEO & founder, Nick Woodman went surfing and wanted to capture his surfing adventures through a hand-held camera that didn’t give up under all that athletic waves. That was 2002. It was the next big thing in the camera market, which changed the way action adventure videos were captured and had a cult following of its own that ran into millions of followers on Instagram & YouTube, is down in the shambles in it’s quarterly & annual reports. You’d be surprised to see these Financials below!
Have a look at this stock price trend from when it started in 2014 to where it is as of today.
Also, have a look at these numbers from their annual reports.
The company went public in 2014 with a lot of fanfare at 24$ a share. In the subsequent quarters, it touched its maximum peak of around 98$. Yay!
And after that? The bubble burst! The company messed up a bit in the subsequent years and its stock price flew down the stock market to where it is at less than one-fifth of its original stock price now. 4.88$ ! Nobody would like to invest in a company that gave less than half the amount of YOY growth in the second year after its IPO. What has happened post it is a series of losses. Its CEO Nick has already said that he is open to selling the company and hired JP Morgan to sell the firm.
What the hell happened to GoPro! What went wrong?
1. A Failed Media Company
Somewhere between 2014 & 2016, GoPro wanted to capitalize on its content framework and said that they wanted to become a Media Company. Considering they had all the resources and gear to make it, it was thought of as a decent push to diversify the company. They made some fat pay-check hires, got senior executives from HULU, Skype & HBO and went forward with it. It briefly produced original content and created a licensing and revenue-sharing platform for content creators. Their bubble burst sooner than ever and in 2016 this idea didn’t pay off resulting in loss in their financial reports & mass layoffs.
2. Crazy SuperBowl Ads
Make a guess how much a 30sec SuperBowl commercial costs ?
Common make a guess!
5.25 Million !!
They shifted from their strategy of UGC to making SuperBowl Ads! You genuinely don’t need SuperBowl Ads when your brand is already popular and has garnered a cult following spanning almost two decades! That kind of shift in strategy costed the company when the targeted ads didn’t return in the kind of sales that the company thought of. Burning cash in the millions!
3. Cheaper Alternatives to GoPro
With the coming of competition to the GoPro market from companies in China ( like DJI, INSTA360, Yi, SONY, etc) giving the same functionality as the GoPro albeit at a lower price, ate up the market share of the brand as its rival offering cheaper alternatives. As most of the ideal customers were Vloggers, artists, thrill-seekers, they usually didn’t have a ton of money to buy the cameras at the higher end of the market, if they could the same functionality at a lower price.
4. Pricing Debacles
Instead of following up its popular Hero 4 cameras with a new flagship camera in 2015, GoPro introduced the tiny Hero 4 Session, which was initially priced at $400. This price was slashed twice and reduced to half its original price to $200, resulting in millions of dollars in writedowns before any buyers showed up. The costly debacle revealed that GoPro grossly overestimated its own brand appeal. That same year, GoPro introduced three low-end and mid-range devices -- the Hero, Hero+, and Hero+ LCD to reach more mainstream users. Unfortunately, this cannibalized their own cameras with such a pricing disaster, lowering consumer price expectations and affecting the sales of it’s higher models. GoPro discontinued all three cameras in early 2016, but the damage was done.
5. Karma is a bitch
GoPro entered the drone market a tad too late when the sky was already full with those birds in the sky. It came up with it’s own drone ‘Karma’ which eventually didn’t fly. These Karma birds fell down faster than they flew up with a failed battery issue which went unnoticed in the trial phase. There goes its reputation to the dirt !
6. A slow response to customer needs
Part of the company’s problem stemmed from the long wait between past releases, particularly ahead of the US festive season meaning that even if customers wished to upgrade, they couldn’t.
GoPro also responded slowly to user demands for easier transfer and editing tools. In early 2016 it finally bought two video start-ups and integrated their tools into its PC and mobile apps. In late 2016 it finally launched a cloud backup platform alongside the Hero 5.
Now, what can be done?
I’ll propose 4 solutions on which GoPro can work on which may lead to an upturn in sales and a brighter future.
1) Focusing on Quality to beat competition
What the competition does NOT have which GoPro has is superiority in quality. By far of all the cameras that I’ve used the GoPro has undoubtedly given the best results than the Chinese copies and the whole software platform along with the GoPro is best in the market right now. GoPro needs to focus on it and look towards continuously innovating it year after year to win in the market.
2) Pricing Strategy
The company should continuously innovate and roll out newer products sooner and space them out strategically. It can emulate Apple to have a product every year and price it strategically if it wants consistency.
3) Cracking the right marketing communication
Let’s check out the marketing funnel for GoPro-
Discovery is the phase where the customers is discovering what the technology is and becoming aware of GoPro.
Realization of need is where the customer is discovering that it actually needs a GoPro.
Consideration is where the customer has made up his mind to buy a GoPro and is now considering alternatives in the market to find the best value for money product.
Conversion to Sale is when the customer has bought the GoPro and is a part of the GoPro family now.
Now as I see it, GoPro has already worked on its Discover and Consideration phase with its unparallel online presence and UGC strategy.
You know what a GoPro is, even if you haven’t seen one yet.
It has sold more than 37 Million Cameras since the first HERO in 2009 so that is clear that customers are buying the product. But where it is lacking is in the Realization of Need phase.
With the advent of smartphones & Iphones capturing almost the same high definition video why do customers need a second device to do the exact same thing? And in any case, if they have shelled out a load of cash for that latest iPhone why pay another bundle half the size for the latest GoPro. I think the company should go back to the drawing board and brainstorm on it’s Why GoPro strategy?
Earlier it had come out with a Capture Different Campaign where it communicated to be in the moment, and let GoPro do the capturing rather than the customer holding the phone and being excluded from the fun.
What it could rather come out with is a marketing strategy focussing on its strength viz a smartphone somewhat on the lines of
Your Phone may break. But the GoPro won’t.
Take it where your Phone cannot. But the GoPro can.
Your Phone will die. But the GoPro won’t !
Focussing on its battery life greater than our smartphones.
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