This marketing report provided an understanding of the marketing strategies and opportunities of Fitbit that can enhance its liquidity profitability and financial stability. Through SWOT analysis and marketing mix variable, different opportunities are identified with the relevant strategies which can benefit the organization. It is based on the secondary data and the information provided by the Fitbit company through their website. The findings of the report show that Fitbit can focus on a new target group through Fitbit Smartphone innovative and including different features such as heart monitoring, glucose monitoring, daily medication alerts, and analyzed blood sugar. This report identified the major threats and weaknesses of the organization that can create a barrier for the achievement of the objectives. Through innovative solutions and focusing on the healthcare system, Fitbit can promote its new product and maintain effective performance in the market.
Table of Contents
Introduction and Background
New product or service
Strategies relevant to marketing mix variables
Fitbit is a health and fitness brand based in America. It was established in 2007 with the purpose of digital fitness tracker and managing the wearables trend. With the smart fitness watch, it provides a challenge to many digital companies (Fitbit 2020). This report is based on the marketing analysis of the Fitbit company to provide an idea about better marketing opportunities. It works through different marketing environments including external and internal environments that help to analyze the strengths, weaknesses, opportunities, and threats of Fitbit. This company works in different products such as smartwatches, activity trackers, and wireless-enabled wearable technology. It is effective to measure the data of the human body such as heart rate, several steps walked, steps climbed, quality of sleep, and other personal metrics that are relevant to fitness (Fitbit 2020).
A marketing report refers to a definite set of data that helps in analyzing the performance of the organization or marketing campaign. It includes research related to promotional tactics, marketing strategies, and expected outcomes (Fill and Turnbull 2016). The purpose of this report is to analyze the specific marketing strategies of Fitbit that are relevant to its marketing environment. This report will also focus on the SWOT analysis of Fitbit to gain a better understanding of the strengths and opportunities that can effectively overcome the weaknesses and threats. SWOT analysis is an effective technique for organizations to study the internal and external environment of the organization with the identification of strengths, weaknesses, opportunities, and threats. Greater risks can be minimized with possible success opportunities.
Fitbit was previously named as “Healthy Metrics Research”. In 2007, this company was founded by James Park (CEO) and Eric Friedman (CTO). The IPO of the company was filed in 2015 for $358 million. When the stocks of the company fell more than 50% in the year 2016, the announcement of James Park with a major transformation has changed the view of the company through consumer electronics companies to digital healthcare companies (Diaz, et al. 2015). Fitbit is considered as the fifth largest wearable brand company with 28 million users in the world. The target market of the Fitbit company is women. With around 28 million active users of Fitbit promotes the use of wearable devices in the world. By attracting the fitness freak people, it gains a higher revenue (Sasaki 2015).
To improve health outcomes, activity trackers are beneficial among adults. Fitbit provides a wide range of products to its customers to get a healthy outcome. Mobile apps and website promote to sync the devices with mobile phones as well through Bluetooth (Fitbit 2020). Customers can easily add their activities, food, and weight to analyze their goals and identify the number of calories burned and consumed. Current products of Fitbit are Activity trackers (Fitbit Inspire, Fitbit Ace, Fitbit Charge 3 and Fitbit Inspire HR), Smartwatches (Fitbit Versa, Fitbit Versa 2, Fitbit Ionic and Fitbit Versa Lite Edition), Smart scales (Fitbit Aria 2) and Wireless headphones (Fitbit Flyer) (Fitbit 2020).
Fitbit is a leading organization in the world with its several strengths that explores better opportunities for future perspectives. Penetration in the new markets is also possible with the strengths of the organization and extensive research. The marketing environment is known as a combination of the internal and external factors of an organization that promotes the establishment of the relationship and manages effective customers. The internal and external environment is a part of the marketing environment that represents different factors of the organization (Kotler, et al. 2018). The internal and external environment analysis of Fitbit can be seen as follows:
The internal environment is referred to as the factors, culture, events, and members in the organization that promotes the ability to influence the behaviour and decisions of the organization with its human resources. Internal factors of the organization are financial resources, physical resources, technological resources, human resources, culture, and goodwill (Kaur and Sharma 2015).
Technology: The hardware and software technologies in the products are effective to track consumer data and show the results in a meaningful way. Through different software such as Bluetooth low energy, Fitbit's algorithm, and PurePulse continuous heart rate tracking brings innovative technology in the market and enhances the practices of the organization (Wang et al. 2015). With a sleek design and appealing wireless sync options attract consumers to purchase the products and get fitness products. However, several substitutes of the products are available in the market with cheaper prices that can affect the sale of the products.
Brand: Fitbit brand is popular in the fitness market that is a valuable source for the organization. Its fitness tracking wearables are popular among customers to seek for high-quality products and maintain digital technology. A brand of the organization is a valuable resource that helps the company to counterbalance the threat of new competitors in the market. Fitbit maintains a market share of 25% in the global market (Wang et al. 2015). It is the biggest performer in the fitness tracking industry. Other premium brands such as Apple, Samsung, and new competitor Kate Spade are major competitors in the market that promote a substitutable product to customers.
Application Program Interface: Fitbit is committed towards an open Application Program Interface (API) that creates better health and fitness opportunities. Through interaction with the Fitbit platform and programmatic access, third party developers promote the integration of different applications with the devices. Weight Watchers, MyFitnessPal, and MapMyRun are some apps that promote integration with the fitness tracking wearables (Huang, Xu, Yu and Shull 2016).
The external environment includes all the factors that affect the organization from outside and impact business operations. To maintain the flow of operations and business effectively, it is analyzed by the organization that helps to reduce the relevant risks. Some of the external environmental factors are political, technology, competition, customer’s social conditions, and economy (Mullakhmetov, Sadriev, Gabidinova and Akhmetshin 2016). Portal's five forces help to analyze the external environment of an organization through the following elements:
Rivalry among existing competitors- High: The first approach for digital wearable devices is gained by Fitbit although the competitors entered into the market with an effective technological advantage. As a premium brand, Fitbit enjoys effective fashion accessories while similar products with competitors promote a high competition (Wang et al. 2015). Fashion and costs are considered as significant attributes that prevent price wars. Fragmentation in the market can be seen through the fitness tracking devices approach in the technological direction. Companies require innovative approaches to differentiate the competition.
Potential entrants- Moderate: The current market position of Fitbit is strong while the threat of new entrants cannot be avoided. With a well-known brand name, the global marketplace covers 25% of sales. Social sharing and external application integration establish switching cost benefits. The access to tracking technology opens the opportunities in fitness tracker industry. New entrants such as Michael Kors and Kate Spade can provide competition to Fitbit.
Power of buyers- High: A variety of products are available in Fitbit that promotes a price range of $34 to $850. New competitors meet the demand of customers at lower prices. More demand forms by the consumers for fitness tracker devices. Fitbit proves itself as a leading brand with diversification and innovation. New features for text messages, fashion accessories, and in-app workouts promote a quality and effective product among consumers.
Power of Suppliers- Low: Chinese companies are outsourced by Fitbit for the manufacturing of different products and produce in a large quantity. Different vendors from China are used by Fitbit for switching between suppliers. It helps the organization to manage control over suppliers. Designs of Fitbit are the Intellectual Property of Fitbit that degrades the copied products (Cadmus-Bertram, et al. 2015).
The threat of substitutes: Fitness tracking devices are based on smartphones and watches to promote health data. The capabilities of the products can be enhanced through available substitutes. Apple is a premium brand that manages high competition with Fitbit.
Through the assessment of industry attractiveness, it can be noticed that high buyer power, high rivalry, and high threat of substitutes provide a challenging situation for Fitbit to maintain a competitive advantage. New unique features or expansion in the total market share can help to manage competitors (Wang et al. 2015).
SWOT-analysis helps in analyzing the internal and external strengths and opportunities of the business to maintain successful results (Mullakhmetov, Sadriev, Gabidinova, and Akhmetshin 2016). Threats and weaknesses help to attain an idea of future risks. SWOT matrix of Fitbit is as follows:
Fitbit is an effective company that focuses on health and fitness improvement and monitoring devices. With a differentiation strategy, Fitbit can focus on broad markets and manage different strategies. Value for the customers can be created by adding new features in the products (de Zambotti, et al. 2018). Recommendation for the target market, new product and services, and marketing strategies are as follows:
A particular group of customers is known as a target market for specific products or services. Four bases of segmentation are demographic, geographic, psychographic, and behavioural. Different product focuses on the different target market of consumers to manage the products. Most of the women are dominating the target market rather than males (Aghdaie and Alimardani 2015). Based on the target market of Fitbit, different segments can be identified as:
Demographic: The target market of Fitbit is based on the gender, age, income, and education of individuals. The products of Fitbit are popular among consumers with the young and adult age group from 15 to 45 years old. Middle-class people are targeted by the company as target customers.
Geographic: To maintain potential customers effectively, the company is working through a particular region and country. The prices are different in the countries based on the cost of the products (Fitbit 2020).
Psychographic: Healthy lifestyle and interest in fitness are the major attributes of customers who are the target customers of Fitbit. A belief of a healthy lifestyle is managed by the company to attract consumers.
Behavioural: Target messages and advertisements are approached by Fitbit to manage the customer’s actions and promote tailored messaging (Fitbit 2020).
Fitbit can focus on a fitness-based smartphone that can fulfil all the needs and encourage individuals to become healthier. The growth of Fitbit lies with social reform and network analysis. Collaboration with the Health, Medicare, and insurance organizations can help to manage specific outcomes in the healthcare system (de Zambotti, et al. 2018). Situation analysis for the expansion is necessary that helps to focus on the market share and offering new products. A completely integrated digital platform can cater to the needs of the medical conditions of the individuals. Daily activities and overall care can promote the use of Fitbit products to maintain a healthy life. Data tracking can be expended to heart monitoring, glucose monitoring, daily medication alerts, blood sugar, and meaningful information that is provided by the healthcare providers of the users(Benedetto et al. 2018). Offering a new fitness tracking space in a differentiated market can help to achieve the target of more customers with lower investments.
This product can help to achieve a new target market of older age groups and the health patients who are facing healthcare issues. Continuous monitoring system approaches towards an effective system that maintains the new customer segments and allows Fitbit to expand in the new countries by popular brand value. A complete focus on healthcare improvement and continuous monitoring through additional features approach towards a better and effective environment. It can promote a customer-oriented approach and manage an effective value to the customers by allowing new customer segments.
Since the maintenance of consumer product and brand name is effective for the company to achieve the desired objectives, thus a need for strategic objectives is necessary. Four P's of the new product are:
Price: The cost of a new Fitbit smartphone can be included as $450 to $799. It can promote a competitive price for the competitors and healthcare experts promote the product. The affordable price of the product can manage glucose monitoring. Health and sleep tracking, improvement in the health and heart rate can help to attract more consumers with new features. Heart monitoring, glucose monitoring, daily medication alerts, blood sugar, and meaningful information as prescribed by the health care specialist can be involved in the Fitbit smartphone (Benedetto et al. 2018).
Product: Fitbit is a superior quality fitness and health tracking device that can appeal the health organizations and B to B organizations. A completely new and features based smartphone can promote an innovative step of Fitbit that can work with the desired health goals.
Place: Fitbit smartphone can be available for order through online stores and other online apps such as Amazon. It can also be available at the retail stores of Fitbit to increase the accessibility of consumers. Affordable distribution channels can be used by the organization to enhance customer satisfaction.
Promotion: Advertisements through television, magazines, and newspapers can help to attract customers. Promotional activities on stores with a 5% discount can address the customers and help them to make a move for purchase (Benedetto et al. 2018).
It can be concluded that Fitbit can enhance marketing opportunities through market expansion and managing to promote a new product in the market. As a health and fitness brand, it is widely popular among young females. The marketing environment of Fitbit provides an understanding of the internal and external environment. It includes the brand value of the organization that works as a valuable resource for the organization. Through the substitutable and premium brand, it dominates in the healthcare system. Innovative and optimum technological features help the organization to achieve higher success and attain business opportunities. Application Program Interface provides apps to interact on the Fitbit platform and manage the competitors. Porter’s five forces provide an understanding of the external environment of Fitbit that can promote the identification of the SWOT matrix. New opportunities for the business are identified with the inclusion of a new Fitbit smartphone that can help in heart monitoring, glucose monitoring, daily medication alerts, blood sugar and provide meaningful information that is necessary for the consumer. Marketing mix variable help to derive different strategies which can promote a new product of the organization. The target market can also focus on the old age group to maintain their health and monitor it continuously.
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