MPK732 Marketing Management for Strategies of Apple

Answers 

1. The current  target segmentation of FitBit is based on level of fitness that determines the price for casual exercisers which is dollar one hundred thirty. The price of HR is dollar one hundred and fifty. The cost of Surge is dollar two hundred and fifty for consumers that are serious regarding the fitness.  Consumers are targeted by age, income, level of fitness, gender, and education. Many fitness band consumers exercise quite often but are non-athletes. The consumers are young as well as middle aged between 25 and 44 years of age (Dontje et al. 2013). The upper middle class, and educated people who have associate’s degree or higher than that. Women who are health conscious women are also the potential target. NPD Group’s April 2015 estimates provide evidence for these data. As per the reports of NPD, Women have 14% more chances to be the consumer of Fitbit. 69 percent of the people fall between 18-44 years age bracket.  29% of the customers have a household income over $100K. 24 % of the customers hold an associate degree or higher.  23 % of the customers are more likely to be a parent (Jooste and Strydom 2014). Potential customers who were interested in buying a wearable fitness 11 tracker were 46% more likely to be sports enthusiast. 29% of the customers were more likely to exercise multiple times in a week. (Sheth and Sisodia 2015). The potential buyers of fitness band are more likely to buy organic food. There are 22% more chances that they will buy locally grown food as much possible and 38% chances are that they would say GMOs affect their grocery purchases most of the time (Sheth and Sisodia 2015). Potential fitness band buyers are often influenced by comments, recommendations, or reviews of products on social media. 56% more of the consumers of fitness band own an Apple iPhone because mostly they are from affluent class.  31 percent of the consumers are more likely to own electronic gadgets like a tablet computer and 36% of the consumers have an eReader. (Hollensen 2015). Based on the data the customers of Fitbit can be divided into five categories fitness activity, age, education, gender, and income level. The battery life and quality of the fitness watches are the most important factors in determination of buying decisions of a wearable tracking device. Therefore, Fitbit is competing on quality with Apple watches as it has good battery life and they are of very good quality in terms of durability.  Apple wearable have latest design and are very stylish. The price of Apple watches are higher but at the same time for the people of affluent class price signifies quality. The features, design, heart rate monitoring, price, sleep cycle monitoring, integration with smart phone or computer software are similar to its competitor Garmin, Samsung, and Jawbone and Nike.  Apple tops the list of the competitors as it has captured most of the market share.  The price of Apple is quite higher than Fitbit making it a premium product. The technology used by Apple allows third party applications. (Hollensen 2015). Another factor that play a major role for the customers while making the buying decisions is the tracking operations of the fitness bands. Jawbone and Nike are the two companies that have very less number of tracking operations.  

2. Perceptual Map

                                                                          Perceptual map: Source (Created by Author)

The perceptual map is of fitbit three major rivalries. Apple as a brand has short battery life compared to fitbit and high number of tracking operations. Fitbit Charge has long battery life and high number of tracking operations. Nike fuelBand and Jawband have short battery life and low tracking operations.

Apple as brand is the most preferred brand when it comes to quality. The high price of Apple does not push away the customers. It has created an impression that quality comes at a price and the customers of Apple are ready to pay that price. Talking about the other brands in the wearable market Samsung is known for providing as many features in the price that it competitors provide. Samsung beats all in technology (Graf et al. 2015). The wearable of Samsung are stylish, trendy and with many tracking operations. Nike has very few tracking operations.

The Apple fitness tracker are inspired by the classic styling of Nike’s FuelBand. That seems logical, since the design of the Activity app is reminiscent of the Nike Fuel ring. The Apple Band design is similar to the charity bracelets that were very popular in the ’90s. The material needs to be of low cost to hit the crucial $99 price point.  Therefore, there is steel or even aluminum here. Rather, the whole thing is sealed in waterproof rubberized plastic. The LEDs would fit  just below the surface of the rubber, so that the light could pass through it. All the electronics are in one side of the strap, which allows the other side to be stretchy to accommodate different wrist sizes while delivering the snug fit needed for the heart-rate monitor. Still, different sizes would be required to fit every wrist (Armstrong et al. 2014).

The brand that can give tough and is giving a tough competition to Fitbit is Apple. The reason is the impression of quality it has created. It has the maximum number of market share. Customers believe that the price charged by Apple signifies quality and status and so they prefer Apple. The most important thing is that in luxury items it is the high price and brand that plays a very important role. The perception of the customers is that higher the price the better quality.

Strategies of Apple

For fitness, Apple has created a large archive of videos, texts and images. It provides features much more than weightlifting it includes all fitness activities and sports. Apple watches uses all that is required to track the unique metrics specific to the fitness activities. Tracking of the diet of the users is a unique feature of fitness that works on many contents, like the database of barcodes of different supermarket that Myfitnesspal has collected. Manufacturing watches of this standard of quality is very much cost intensive.

Communities are the important area which is not present in the in- built fitness features applications like Endomondo and Strava excel are required to be present in the watches. For example, Cupertino does not have any community in it. Otherwise, it is an excellent watch. This makes apple a Workout app targeting beginners, assisting them in their work out, and dieting regimes. It allows third-party applications to fulfill the requirements of serious fitness enthusiasts (Foxall 2014). Strava is an advanced application. The cyclists opt to use this app instead of in-built fitness workout applications of Apple.

Apple has launched a new Workout API that lets the third-party applications to log into the active workout session. Therefore, it automatically becomes the first application that users see during their workout sessions. It is capable of monitoring the heart rate. It does not take much time to update the stats and the users do not have to wait. The calories burnt are summed up to the Move ring that adds up in activity app of Apple. Third-party fitness apps will be developed completely. It is evident that Apple has taken initiative that helps other brands that act as third parties to make their fitness applications more efficient. The in-built Workout application of Apple is very less and other Watch apps might take the advantage of the limitations of Apple.

Apple might be in a risky position for promoting third-party apps. The users in this case tend to show their loyalty to the party apps and to Apple. Nike and Apple might be partners presently but in future, if Nike plans to make an exclusive deal with Samsung the customers of Apple might switch to Samsung. It would be grave loss for Apple as it might lose its market share.

Activity apps are very important for the strategy of Apple. Activity applications are important for the Watch platform. It enables other brand’s applications to take their workout data into the Move and Exercise rings. Apple makes sure that it has the fitness experience of their users. Irrespective of the fact, which app is logging (Guo, Li, Kankanhalli and Brown 2013). Another weakness is that Apple’s battery life is shorter than Fitbit and which gives competitive advantage to the company.

References

Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction. Pearson Education.

Dontje, M.L., de Groot, M., Lengton, R.R., van der Schans, C.P. and Krijnen, W.P., 2015. Measuring steps with the Fitbit activity tracker: an inter-device reliability study. Journal of medical engineering & technology, 39(5), pp.286-290.

Foxall, G., 2014. Strategic Marketing Management (RLE Marketing) (Vol. 3). Routledge.

Graf, B., Krüger, M., Müller, F., Ruhland, A. and Zech, A., 2015, November. Nombot: simplify food tracking. In Proceedings of the 14th International Conference on Mobile and Ubiquitous Multimedia (pp. 360-363). ACM.

Guo, F., Li, Y., Kankanhalli, M.S. and Brown, M.S., 2013, October. An evaluation of wearable activity monitoring devices. In Proceedings of the 1st ACM international workshop on Personal data meets distributed multimedia (pp. 31-34). ACM.

Hollensen, S., 2015. Marketing management: A relationship approach. Pearson Education.

Jooste, C. and Strydom, J.W., 2014. Marketing management.

Kotler, P., Keller, K.L., Ancarani, F. and Costabile, M., 2014. Marketing management 14/e. Pearson.

Sheth, J.N. and Sisodia, R.S., 2015. Does marketing need reform?: Fresh perspectives on the future. Routledge.