N500 Marketing : Security Analysis Assessment Answers

Answer:

A. Introduction

Company Background: Fitbit is an American company that was set up in 2008 by James Park and Eric Friedman. The headquarter of FitBit is in San Francisco.  The company  has varied products such as wireless enabled technological device such as measuring heart rate, number of steps walked, steps climbed, quality of sleep and activity trackers (Fitbit.com 2017). The aim of this paper is to analyze FitBit’s marketing in USA.

Products:The product that was first released by the company is known as the Fitbit Tracker. The company has a dedicated for the development of fitness and health that will help in transforming the life of the people. Health is regarded as a more serious business that will help the people to have fun, feel empowered and smile along the way. Fitbit offers mobile app and website for Android, iOS and different mobile versions. The users are also provided with the facility to keep a track of their activities, food intake and thus set the daily goals accordingly (Mackinlay 2013). They can also keep a track of the calories burned, amount of carbohydrates consumed and the distance travelled or walked(Adam Noah et al. 2013).Among the 50 innovative countries, the rank of Fitbit is 37 (Fitbit.com 2017). This paper will highlight the PESTLE analysis of FitBit in USA. Moreover, the paper will also highlight Porter’s Five forces, SWOT analysis, target market and marketing mix of FitBit.

B. Fitbit Business Mission

The mission of the company is to inspire and empower a healthy and active life. FitBit designs various products that helps in achieving the fitness and the health goals in any situation (Fitbit.com 2017).

C. Fitbit External Marketing Audit

It is necessary to analyze the external as well as the internal environment in the marketplace for the success of an organization. The PESTLE analysis will help to identify the external factors of USA which plays an important in company:

FitBit is one of the leading company which manufactures health and fitness products. The company is subjected to high corporate taxes. There is no such involvement of US Government since August 2015 when the government has collaborated with “the Flex Tech Alliance” with many companies such as Hewlett-Packard, Apple, Motorola. It has been found that the government of US has concentrated on hybrid electronics because this contributed a major portion of the revenue for the development of the economy.  The vendors in the US economy also receives feedback and support for the development of lightweight electronics with large, easy and quick manufacturers. The Foreign Direct Investment of USA does not intend to monitor the wellness and fitness products and thus reduce the risk of chronic disease in the country (FitBit 2017). FitBit has to face a class of lawsuit. The publicity of this lawsuit has helped in gaining consumer’s likelihood to purchase the product of FitBit. The company is also dependent on the lower cost of technology in USA. Moreover, political unrest in the economy will also increase the manufacturing cost of Fitbit. The company also depends on a wide variety of products which are covered by intellectual property law (Zheng et al. 2013).

Economic

It is easier to make products in China than United States. Moreover, the labor cost in China is increasing and thus it affects the FitBit to manufacture products in the overseas country. This is advantageous for USA as the company can start its production in this country. The increased labor cost of the country can be regarded as a disadvantage to the company. Moreover, the rise in US dollar will increase the exchange rate and thus this will be more disadvantageous for the company to carry out business in the US market (Paul et al. 2015).

The environmental side effects and pollution may be considered as the most important threat which is posing danger to USA. There might be higher cost and increased regulation in the future due to the environmental pollution. The country is also trying to lower the effect of greenhouse, fossil fuels, electricity and manufacturing cost which for FitBit in USA. Moreover, climate change will affect the supply chain framework of the company. There must be some concern on the energy use which will lead to higher regulation and cost (Dontje et al. 2015)

The consumers of FitBit are mostly the youths in the global market. This people has strong emotional attachment with the product and thus it will help in improving the sale of the product. Moreover, it can be said that the customers in the USA market prefer to use stylish and expensive product. There are also some ethical concerns related to the manufacturing of FitBit and thus its product will be appealing among the socially conscious customers (Cadmus-Bertram et al. 2015).

Technological forces

The competitors of FitBit are trying to copy the technology and innovation so that they can duplicate the product or the service. The number of consumer products of FitBit are very limited and the company is trying to bring new products in the market. Due to the growing development and innovation of the other products, the popularity of the products of FitBit will be lowered. Moreover, the company will also try to gain high level safety and security in the global market (Diaz et al. 2015).

1) Smart watch industry analysis(Porter 5 forces)

Industry rivalry

Due to the high bargaining power of the buyers, high rivalry, high threat of substitutes, it is challenging and difficult for fitness tracker industry to gain competitive advantage in the market. It is important to change the dynamics of the industry and thus focus in the expanding potential share in the market place. FitBit will offer unique and new features which is not offered by the substitutes or the competitors such as apple, Xioami, Google Pro. The new competitors of FitBit such as Under Armour and New Balance is also trying to capture the market, however FitBit is taking a risk to compete with Apple (Cadmus-Bertram et al. 2015).

Fig: Market Share of wearable manufacturing company

Source: Statista, 2017

Threat of new entrants

FitBit has a well-built brand name and it holds more than 25%of the market share in the global market. The company has also established switching cost through external application integration and social sharing. On the other hands, the new entrants in the market have forced FitBit to lower the price of the product and to remain competitive in the global market. There is low barriers to entry in this industry and the market position of FitBit is comparatively strong (Gusmer et al. 2014).

Threat of substitutes

The threat of substitutes is high in this industry because there are many smart watch companies which are enhancing fitness tracker capabilities of their product. The smart watch which was introduced by Apple has collaborated with Nike and it has targeted the fitness enthusiastic who are comfortable with the watch, improved running features and GPS technology (Fitbit.com 2017). The other companies are also positioning itself as an important substitute in this industry. Therefore, FitBit can be regarded as a premium brand and it is trying to capture the entire market.

Bargaining power of buyers

The buyers can choose a variety of tracker brands and products It can be said that the competitors of FitBit has attracted more customers because they offer the product at a lower price. This has also helped in further diversification and innovation of FitBit which wants to become a leading brand. The company also wanted to introduce new app for this smart watch (Tully et al. 2015).

Bargaining power of suppliers

FitBit outsources its products to the Chinese companies and it also helps to buy the product in large quantities. The company uses different vendors in China I for smart watch and other products so that they can switch between the different suppliers. These designs can be regarded as intellectual property of FitBit and it becomes difficult for the manufacturers of other companies to imitate the product. Moreover, the company also has many alternative vendors for manufacturing devices (Sasaki et al. 2015)

A. SWOT Analysis

FitBit has great technology and value. It is famous for its broad device portfolio and also has great advantage in technology. FitBit also had a built-in advantage of agility, speed and the desire to take risks. The company also has easy access to technology. Moreover, it was the first technological startup in the fitness tracking industry and thus it has built a strong user base will is regarded as an essential element for the long term success of the company. Initially, FitBit has driven initial success by offering products with great features, attractive price and good looking design. It can be said that FitBit Flex is the lowest price device which is provided at an attractive cost. Moreover, FitBit is also available on varied platforms such as Android and iOS. It also has an open API and partnership with the health apps andmobile fitness apps which will help to import results. Moreover, FitBit also helps to export data which is regarded as a premium feature. The company also has a well set of programs for the health insurance providers and the companies. It has also built certain programs to build the user base and then expand for minimal marketing investment (Tully et al. 2015).

As a technological startup company, FitBit pays greater attention in technology and not on the credibility or intimacy in the fitness and health market. This can be overcome easily and it will help to build the brand   and the customer base of the company. The company also does not have a large marketing budget that is important for building the brand awareness of the company. However, FitBit tries to build the marketing base like distribution channel, great value and business-to-business distribution.

Opportunities and Threats

FitBit will help to build richer data base which is necessary for tracking. It will also be beneficial for big data analytics and also help to get dietary expertise. The company also takes initiative in coaching and analytics. The fitness experts of the company will calculate the quality of food and the calorie intake of the food that is important for health and fitness goals.  The company must try to invest in cutting edge technology and varied sensors that will help to demonstrate better information and enhance the data set. FitBit can try to position itself as a leader for the health and wellness seeking people. The company also has a corporate wellness strategy that will help to build a better foundation for FitBit (Wang et al. 2015).

 FitBit has also faced threat from Apple Fitness app and Jawbone. There are many new entrants in the market which will help to access the heart rate, calorie intake and thus this are posing threat to FitBit. The new technological startup is also regarded as a threat for FitBit.

B. Target Markets

The targeted customer segment of FitBit is women from the age group of 25-3O who prefers to wear stylish products and are also health conscious. The campaign which was held by company depicts that FitBit is trying to appeal customers from all segments and age group. It has been found that when the women segment tries to lose weight, they decide to diet rather than doing any physical exercise.  It has been found that despite the low market share of the company, FitBit is going ahead with a new marketing focus. FitBit is trying to expand in fashion focused products and  it is also collaborating for sponsorship with BBC Sports Relief (Fitbit.com 2017). The company is trying to dominate the activity tracker market with an increase in the revenue from 168% to $409.3 for the third quarter in 2015. The company is trying to expand further and its revenue has increased from $620 m during the fourth quarter (Fitbit.com 2017). It has expected to reach an annual revenue of $1.8 bn, although its share price is showing a declining trend since the beginning of January when its bestselling product has failed to meet the expected revenue. The company has also launched a smart watch in that combined fashion with fitness and the product was purchased by many customers. This product has also stood has a rival of Apple smart watch. The main target of the company was to appeal in USA market so that it ramps up for different fashion credentials. The company is also trying to get recognized in the market which will help in the creation of connected and inspiring minds (Tsubouchi et al. 2013).

C. Fitbit marketing mix

1) Product

FitBit specializes in the manufacturing of monitors which helps an individual to track the physical activities. The products that are offered by FitBit will differ according to the price. Moreover, some products of FitBit are worn as belt or wrist and thus are preferred by a wide range of customers. FitBit also manufactures Zip which can be clipped into an individual’s belt. Moreover, it also manufactures Surge which is worn on the wrist to keep a track of the pulse rate and the GPS location. Surge can also be connected to an individual’s smartphone and thus it will be used to connect to the music and also get notification from different devices (Tsubouchi et al. 2013).

1) Promotion

FitBit is regarded as an industry leader in the wearable market. The company possesses more than 22.5% of the market share. FitBit Inc has also set up a marketing campaign strategy in the grassroots level in the organization. The in-store marketing campaign, local store marketing and public relations of the company has also helped in the marketing of the product (Cyr et al. 2014). FitBit is also switching its marketing strategy by concentrating on more creative in-house and search for a new media agency. The Personal goal setting in the FitBit app also provides step-by-step guide on the different processes that are based on insights from health and fitness and other data related objectives. The company is trying to reach the customers through digital and social media, TV advertisements. The company also promotes Twitter and Community support on its contact page (Fitbit.com 2017)

2) Price

The price of FitBit products are comparatively higher than the other products in the market. Some of its product are sold in EBay or other online sites at a much cheaper price. This helps FitBit to become one of the leading competitor to other companies such as Xiaomi, Apple (Tsubouchi et al. 2013).

3) Place

FitBit is sold in online as well as offline stores. The FitBit Ultar is sold in Amazon, Best Buy, radio Shack. Moreover, consumers can also buy the product from FitBit website. The product is also sold at a discounted price in the market (Fitbit.com 2017).

Conclusion:

Thus, it can be said that the company has an opportunity of earning profit if it implements the business plan in a proper way. It is important to improve the products of FitBit and focus on its sales to improve the performance of the company. The company is trying to engage more people for developing the market plan and improving the profitability. FitBit has targeted the youth and the women customers in USA for their products and accessories. It is essential for the company to expand and develop the sales team and also develop the kids market. This will help in increasing the value of the cash flow and the shareholders of the company. Therefore, it can be said that if Fit Bit adopts these approach, it can develop and grow which will be beneficial for the company in the long run.

Reference:

Adam Noah, J., Spierer, D.K., Gu, J. and Bronner, S., 2013. Comparison of steps and energy expenditure assessment in adults of Fitbit Tracker and Ultra to the Actical and indirect calorimetry. Journal of medical engineering & technology, 37(7), pp.456-462.

Cadmus-Bertram, L.A., Marcus, B.H., Patterson, R.E., Parker, B.A. and Morey, B.L., 2015. Randomized trial of a Fitbit-based physical activity intervention for women. American journal of preventive medicine, 49(3), pp.414-418.

Cyr, B., Horn, W., Miao, D. and Specter, M., 2014. Security analysis of wearable fitness devices (fitbit). Massachusets Institute of Technology, p.1.

Diaz, K.M., Krupka, D.J., Chang, M.J., Peacock, J., Ma, Y., Goldsmith, J., Schwartz, J.E. and Davidson, K.W., 2015. Fitbit®: An accurate and reliable device for wireless physical activity tracking. International journal of cardiology, 185, p.138.

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.

Fitbit.com 2017. Fitbit. [online] Available at: https://www.fitbit.com/in/about [Accessed 20 Dec. 2017].

Gusmer, R.J., Bosch, T.A., Watkins, A.N., Ostrem, J.D. and Dengel, D.R., 2014. Comparison of FitBit® Ultra to ActiGraph™ GT1M for assessment of physical activity in young adults during treadmill walking. The Open Sports Medicine Journal, 8(1).

Mackinlay, M.Z., 2013. Phases of accuracy diagnosis:(in) visibility of system status in the FitBit. Intersect: The Stanford Journal of Science, Technology and Society, 6(2).

Paul, S.S., Tiedemann, A., Hassett, L.M., Ramsay, E., Kirkham, C., Chagpar, S. and Sherrington, C., 2015. Validity of the Fitbit activity tracker for measuring steps in community-dwelling older adults. BMJ open sport & exercise medicine, 1(1), p.e000013.

Sasaki, J.E., Hickey, A., Mavilia, M., Tedesco, J., John, D., Keadle, S.K. and Freedson, P.S., 2015. Validation of the Fitbit wireless activity tracker for prediction of energy expenditure. Journal of Physical Activity and Health, 12(2), pp.149-154.

Statista.com 2017. Statista. [online] Available at: https://www.statista.com/statistics/435944/quarterly-wearables-shipments-worldwide-market-share-by-vendor/ [Accessed 21 Dec. 2017].

Tsubouchi, K., Kawajiri, R. and Shimosaka, M., 2013, September. Working-relationship detection from fitbit sensor data. In Proceedings of the 2013 ACM conference on Pervasive and ubiquitous computing adjunct publication (pp. 115-118). ACM.

Tully, M.A., McBride, C., Heron, L. and Hunter, R.F., 2014. The validation of Fitbit Zip™ physical activity monitor as a measure of free-living physical activity. BMC research notes, 7(1), p.952.

Wang, J.B., Cadmus-Bertram, L.A., Natarajan, L., White, M.M., Madanat, H., Nichols, J.F., Ayala, G.X. and Pierce, J.P., 2015. Wearable sensor/device (Fitbit One) and SMS text-messaging prompts to increase physical activity in overweight and obese adults: a randomized controlled trial. Telemedicine and e-Health, 21(10), pp.782-792.

Zheng, J., Shen, Y., Zhang, Z., Wu, T., Zhang, G. and Lu, H., 2013, September. Emerging wearable medical devices towards personalized healthcare. In Proceedings of the 8th International Conference on Body Area Networks (pp. 427-431). ICST (Institute for Computer Sciences, Social-Informatics and Telecommunications Engineering).