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Market Research Procedure

Question:

What is the Market Issues in Strategy Development ?

There is almost double digit growth wearable tracking device market; it is expected to grow further. Among all devices, wrist wear accounts for more than 70 percent of products. This is a marketing strategy development paper, prepared on Fitbit. Reason behind selecting this company is uniqueness of product, increasing popularity and ability to change healthcare and fitness environment positively. This paper discuss four major issues, first is 5 c of market, market research procedure of the company; based on market analysis segmentation and positioning strategy is given and marketing plan is presented. Fitbit has revolutionize the wearable technology industry and made its unique brand image.

Fitbit is an American company that manufactures health tracking products. It was founded by Eric and James in the year 2007 (fitbit.com, 2015). It is a globally operating company that provides technology enhanced products to optimize health and fitness experience. Its mission is to “empower and inspire” to live a healthier and active life.

Fitbit deals in wide range of health and fitness products such as activity trackers, wireless enabled technology that helps in measuring steps walked, heart rate, steps climbed etc. Various brands launched by the Fitbit include Zip, One, Flex 2, Alta, Charge 2, Blaze and Surge. It has divided its product range into everyday fitness that include four products, which are trackers; second is active fitness that include Fitbit charge2 and blaze; third is performance fitness that include Fitbit surge and finally the Wi-Fi weighing scale. Its products helps in calculating GPS tracking facility that help in understanding distance, speed, time, pulse rate, sleep, total day activities such as total steps taken, distance, calorie burned, activity minutes, hourly activity.

Fitbit has a strong brand image in the market, it is a successful product in UK and USA, expanding its market reaches in Asia and other markets (www.fitbit.com, 2016). Fitbit is also making shift from fitness to fashion also. However, there is low brand awareness regarding such fitness products in many markets, enhancing the same which increase new scope for market development.

Though Fitbit products are highly technological but there ease of use helps in making them user friendly. This was the first organization that launched such tracking device with strong health focus; it achieved first mover advantage that helped in high sales and revenues. However, problem with products of this brand include premium pricing strategy. Different market researches shows issues regarding plain and simple designing of Fitbit products, they are not stylish and fashion statements. Business growth rate for Fitbit is high, immense opportunity lies in various developing market where product is still at introductory stage; rising concern towards health issues and healthy living in market is also giving new opportunities for product development. It has 85 percent of share of tracking devices (McNew, 2015). Company try to offer broad range of products at various price levels to cater demand of various customer groups. However, tracking device business industry and economic condition has strong correlation, spending on such devices are seen in developed nation with high disposable income.

Segmentation and Positioning Strategy

If persona of a Fitbit customer is to be analysed, it include a person who is doing a desk job, earning 100k+more annually; who is a the savvy person, uses smartphone, willing to purchase a product that receive positive feedback on social media on helping improving healthy living and habits, one who is willing and aim to work out regularly, lives in USA and of mid age. Therefore, it include target segment 25 + of age, is comfortable with technology, frequently uses social media, has an expendable income. Fitbit has built a very niche market to cater and try to serve best to its target segment. It target both male and female population with 25 and above age. However, it gives more stress on female segments, especially moms (Dumoriter, 2016). It operates in different markets such as USA, Dublin, Japan, India, Hong Kong, and Shanghai. On behaviour basis, its customers look for continuous motivation and support for workouts, it tries to give that technological support and sharing through data tracking, sharing etc. (Holm, 2006).

There is group of suppliers in china and Singapore who are responsible for manufacturing hardware for the company; however company keeps the name remain undisclosed. However, it did mention that Flextronics is its primary contract manufacturer of majority of devices. There is marketing, technology, innovation teams responsible for successful operations. Fitbit is encountering market problem in meeting total market demand, failing to meet demand impact business negatively (Marshall, 2016).

Fitbit is encountering intense market competition from big market players such as Nike, Apple, and Microsoft and Pebble technology. Direct competitors include Nike Fuel band, 24 hour bodybugg, Jawbone UP2. Further, products from Fitbit are not water resistance, whereas Pebble corp. products are more stylish and provide water protection. There is intense indirect competition from substitutes like non-clinical weight loss programs (Stables, 2015). Apart from this category wise competition is from free health care items, low priced products, personal management etc. Market analysis shows rising trend in fitness wearable devices. According to Statista.com, in year 2018 the figure is expected to be worth $12,642m, total number of units expected to be shipped are 224 million. It is expected that almost 40 percent of customer will be from US market (statista.com, 2016). With increasing demand, tech giants such as Apple, Google are also launching such wearable gadgets. Further, there is also high market threat from new products and market entrants as still this industry lifecycle is at introductory stage.

This section will present various other external factors impacting business of Fitbit. Political scenario has strong influence on business growth and advancement. Fitbit is a US based company, being a leading economy USA offer business opportunities, liberty. It has strong economic scenario, with GDP is over $16.760 trillion (tradingeconomics.com, 2015). However, there is reduction in corporate profits by 1.2 percent. Social environment of US shows total population of 321,418,820. There is concern towards ageing population, poor health and obesity in the economic; the nutrition curve is also downward sloping showing rising concern towards health issues. However, this shows favourable market opportunities for Fitbit as it can act as tool to overcome this problem. Market offers high technological opportunities for business; almost 85 percent of US population is tech friendly, providing scope for such products. There is large growing community of Fitbit users, which shows positive market trend for wearable tracking devices (McNew, 2015). There is presence of high tech companies such as Apple, Google, and Microsoft in the market. There is rising concern towards climatic changes, global warming issues; company need to make strong strategies in regards to waste management, Carbon emission to ensure low pollution (Silbert, 2015).

Marketing Plan

Market research impacts the way data is collected and presented by organization, it influences the authenticity and reliability of presented information. Market research is conducted by organization to understand customer needs and demands; it is also conducted to evaluate competitors’ position to analyse potential market threat; it aims to evaluate changing environmental condition and prospective influence on company strategic growth. Market research is the key information collection strategy that impact overall strategic process.

Customer data is collected through Fitbit app; whenever a customer activates a Fitbit device they download their software and install information regarding them. This information is used by the company to evaluate personalized fitness stats for customers; it also uses their activities track record to measure their development (fitbit.com, 2016). It also collects information regarding all visitors who visit its websites. Other ways of collecting data include contest, giveaways, community, social media, and participation in surveys. Internal market research is being conducted to evaluate market environment trends, competitor’s position and strategies. Tools such as project planning, troubleshooting are implemented to evaluate market trends.

Fitbit does not go for mass marketing, rather it focuses on small group of customer, fulfil their needs better than anyone else in the market. Niche segmentation of Fitbit is based on demographics, geographic regions and behavioural patterns. According to demographic parameters, it aims to cater both male and female customers above 25 years of age, preferably working professionals from middle and upper income group. Geographically, it is present in six markets USA, Dublin, Japan, India, Hong Kong, and Shanghai; Asia is being projected as prospective market with huge market development scope (Stevenson, 2016). On behavioural grounds, Fitbit prefer to target customers who are tech savvy, well educated, involved in social networking, health conscious, seek for continuous motivation for health development. It aims to target different customer groups such as major market segment include athletes, individuals, hospitals and clinics, corporations, people who want to reduce weight (Dibi & Simkin, 1996).

On the basis of segmentation, Fitbit tries to target customer group between 30 to 40 years of age, who is trying to reduce weight, suffering from health issues, looking for healthy options, motivation to achieve their health goals. It target customer group who have money but no time to give. It also target technology users who seek for tools that provide them quick and easy monitoring on their health without much effort. Fitbit provide an effortless experience to its users. Its direct target groups include office Oliver, person with heavy headed hobby, mothers, and health conscious personality.

Fitbit is helping those customers who are looking for a way to improve their activity level without a big commitment; it has successfully managed to implement short term attainable goals through its products and its technology. Fitbit differentiate its offering on the basis of product features and accurate technology. It has been able to redefine health to make measurable development towards detecting illness and make progress towards healthy life (McNew, 2015).

Fit bit has positioned itself as a tool that help in “living a healthy life, balanced by tracking all day activities, exercise, sleep and weight”. It positions itself as digital healthcare company that is integration between social networking and hardware to achieve desired goals (Stevenson, 2016). It has made its distinctive market position on the basis of product quality and accuracy of measurement. It is easy to use, have more features than other brands.

External Factors Impacting Fitbit's Business

On the basis of above analysis, Fitbit is performing well in its niche market segment; it has well defined its target and what it plans to offer them. Further, it is advised that due to increasing obesity in the market, Fitbit can also target teenagers and youth from 15to 25 years of age. It is also advised to add new design as Fitbit products are not fashionable; it can add new option of personalization of design.

On the basis of analysis presented in issue one, two and three; it is clear that Fitbit aims to maintain its position of market leader; it aims to implement product and market development strategies as it will help in launching new product and enter new markets; finally it also aims to increase market awareness regarding tracking devices in developing markets.

Presently company is offering almost nine different types of products in three key categories on the basis of fitness needs. Fitbit products have large number of features, ease of connectivity, robust packing with several motivational quotes above them to inspire the user. Further to achieve set objectives, it is recommended that Fitbit can opt for strategic partnership with insurance companies, healthcare organizations, fitness centres. This service will help Fitbit users to sign with their partnering insurer, fitness centre; it will help in sharing of data on large platform regarding each member. However, data sharing will be with due consent and voluntary basis only. It will help Fitbit in attracting new members, ability to sell products at different places, fitness clubs etc.

Analysis shows that Fitbit products are priced premium, it might because low sales in certain market as purchase of healthcare products are strongly dependent on economic conditions. Above product will help in providing discount by Fitbit users; it will help in increasing sales and brand loyalty. Fitbit can also offer discounting cards for their partnering clubs; it will help in motivating customers to purchasing tracking bands. Skimming price causes low sales, in order to expand its market reach, Fitbit needs to provide different types of lucrative offers to attract and retain customers.

Fitbit can sell its products globally through website and e—commerce. It sells through its own website in US market; it has also tied up with various e-commerce sites catering different local markets. Above stated product recommendation will enhance product reach of Fitbit, it can be sold at different fitness centre, through health insurance companies, and there will be more intermediaries and ease of customer reach. It will also facilitate in enhancing product awareness in the market.

Promotional goals of Fitbit are to increase its market reach, product reach, create awareness. Its media objective is to make such advertisements that will help in making people realize that it’s easy to remain fit. Social media is being strongly used promotional tool for the company, Facebook activity is the most widely used tool that include various interactive sessions, workout reports, information sharing. Facebook can be used to interact with customers, inform them about various offers (Chaffey, 2008). There is need to create advertisements that create an emotional bond between customers and the product; it aims to make them aware regarding uniqueness of its possession and usage. Sales promotion tools will also help in tying up with various health care organizations, fitness centres and health insurers. With business development, Fitbit can also launch its offers through print media, magazines on health, fitness and healthy living (Czinkota & Kotabe, 2001).

Conclusion

Fitbit is a successful name in wrist-bands to clip-type devices for health tracking but there is much scope left to be tapped. Market scenario shows positive trend of growth and future prospects for this business. Though there is intense market competition but innovation and quality customer service helped Fitbit to remain at the top. Fitbit is presently targeting a small customer segment but it can plan for further expansion to reach a larger group and market. It is advised that Fitbit can enhance its market reach by partnering with healthcare service providers, fitness centres and health insurers.

References

Entire News Link. (2016, March 1). Fitbit Blaze is a whole workout in a wearable. Retrieved September 16, 2016, from www.entirenewslink.com: https://www.entirenewslink.com/fitbit-blaze-is-a-whole-workout-in-a-wearable/

Chaffey. (2008). Internet Marketing: Strategy, Implementation And Practice, 3/E. New Delhi: Pearson Education India.

Czinkota, M. R., & Kotabe, M. (2001). Marketing management. Boston: South-Western College Pub.

Dibi, S., & Simkin, L. (1996). The Market Segmentation Workbook: Target Marketing for Marketing Managers. London: Cengage Learning EMEA, .

Dumoriter, A. (2016, January 8). The Market Misunderstands Fitbit -- Here's Why. Retrieved January 24, 2017, from www.fool.com: https://www.fool.com/investing/general/2016/01/08/the-market-misunderstands-fitbit-heres-why.aspx

fitbit.com. (2015). Who We Are. Retrieved January 24, 2017, from /www.fitbit.com: https://www.fitbit.com/in/about

fitbit.com. (2016). Fitbit Privacy Pledge. Retrieved January 24, 2017, from fitbit.com: https://www.fitbit.com/en-ca/legal/previous-privacy-policy

Holm, O. (2006). Integrated marketing communication: from tactics to strategy. Corporate Communications: An International Journal, 26-32.

Hooley, G., Piercy, N., & Nicoulaud, B. (2012). Marketing Strategy and Competitive Positioning. London: FT Prentice Hall.

Kotler, P. (2012). Kotler On Marketing. New York: Simon and Schuster.

Marshall, G. (2016, September 9). The story of Fitbit: How a wooden box became a $4 billion company. Retrieved January 24, 2017, from www.wareable.com: https://www.wareable.com/fitbit/youre-fitbit-and-you-know-it-how-a-wooden-box-became-a-dollar-4-billion-company

McNew, S. (2015, September 15). FitBit's 7 Competitive Advantages Over Other Brands. Retrieved January 24, 2017, from /www.fool.com: https://www.fool.com/investing/general/2015/09/05/7-competitive-advantages-fitbit-says-it-has-over-o.aspx

Rainmaker, D. (2015, January 20). Fitbit Surge In-Depth Review. Retrieved January 24, 2017, from www.dcrainmaker.com: https://www.dcrainmaker.com/2015/01/fitbit-surge-depth-review.html

Silbert, S. (2015, December 10). Why Fitbit Is Still Winning Wearables. Retrieved January 24, 2017, from fortune.com: https://fortune.com/2015/12/10/why-fitbit-winning/

Stables, J. (2015, February 23). Basis Peak v Fitbit Surge: Battle of the super trackers. Retrieved January 24, 2017, from /www.wareable.com: https://www.wareable.com/fitness-trackers/basis-peak-vs-fitbit-surge-861

statista.com. (2016). Facts and statistics on Fitbit. Retrieved January 24, 2017, from statista.com/: https://www.statista.com/topics/2595/fitbit/

Stevenson, A. (2016, october 16). Fitbit CEO reveals he’s transforming the mission and purpose of the company. Retrieved January 24, 2017, from cnbc.com: https://www.cnbc.com/2016/10/06/fitbit-ceo-reveals-hes-transforming-the-mission-and-purpose-of-the-company.html

tradingeconomics.com. (2015). USA GDP. Retrieved January 24, 2017, from tradingeconomics.com: https://www.tradingeconomics.com/USA/gdp

www.fitbit.com. (2016, September). Product. Retrieved January 24, 2017, from www.fitbit.com/: https://www.fitbit.com/in/surge?utm_source=Google&utm_medium=Search_&utm_campaign=IN-Model-Surge-Exact#features

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