Contents

Introduction...........................................................................................................................
Corporate Objectives................................................................................................................
Market Overview.....................................................................................................................
Marketing Audit: Internal and External Analysis...........................................................................
Marketing Mix....................................................................................................................
SWOT Analysis...................................................................................................................
PESTLE Analysis.................................................................................................................
Porters Five Forces Analysis..................................................................................................
Market Assumptions................................................................................................................
Marketing Objectives for New Product.........................................................................................
Marketing Mix for New Product.................................................................................................
Promotional Campaigns.........................................................................................................
Bibliography........................................................................................................................

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Introduction

Brits have embraced the health and fitness culture and have contributed to success of
various health-related products. Wearable technology has also reaped the benefits of
this culture and Emarketer.com (2017) predicts that its penetration is going to double
in 2016 in the UK. Wearable technology has many applications such as fitness/sports,
medical, fashion. Medical uses of wearable technology are widespread ranging from
treatment for hearing impairments to monitoring of blood glucose level for diabetes.

Diabetes is a disease in which there is elevated blood glucose level over a long period
of time. If it is left uncontrolled, it can lead to a lot of complications and can be fatal.
The severity of this disease can be ascertained from the fact that number of people
suffering from diabetes in the UK is 4.5 million (Diabetes.org.uk, 2017). Medical
devices which measure the blood glucose level have made the life of diabetic people
very easy. However it needs to be noted that such medical devices only have the
capability to measure glucose levels and cannot track fitness parameters. This presents
us with an interesting opportunity to become one stop solution to the need of diabetic
who also want to keep account of their fitness.

Fitbit, the first company to introduce a wearable fitness tracker and the market leader
only has these trackers in its portfolio. Interestingly the company has been very
innovative in this technology. Fitbit will introduce a fitness tracker with an additional
feature to monitor blood glucose level. The key suggestion is to move to a new
product in the same market. This product will allow a diabetic to enjoy the fitness
and healthier lifestyle

Corporate Objectives

According to Fitbit.com (2017), its mission is:

To empower and inspire you to live a healthier, more active life. We design products
and experiences that fit seamlessly into your life so you can achieve your health and
fitness goals, whatever they may be.

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In an article by Hobbs (2017), Fitbit UK marketing director Lucy Sheehan states that
the target for 2016 revenues is 1.2bn. For 2016, their objective was to add a fashion
component to their product portfolio and hence they introduced the Fitbit Blaze
Watch, which incorporated both fashion and fitness. Hobbs (2017) quotes Lucy
Sheehan, saying, Bringing in the interchangeable strap and finding more ways to
integrate Fitbit into everyday life is definitely the key strategy we now have. We want
to create a shift in the wearables market; Alta has to be seen as beautiful and
something that fits with your outfits not just as a niche fitness accessory.

Market Overview

Wearable technology is growing at a rapid rate. According to Mintel (2017), the

number of wrist-worn wearable devices sold in UK in 2015 increased to over 3
million from 1.4 million in 2014, showing a growth of 118%. Product wise, fitness
bands boasted at 63 % of the sales while Smartwatches have sold at 37%. This could
be interpreted as wearable technology has picked up attraction and consumers are
more health aware. Nonetheless, Smartwatches sales were at 9% in 2014, which, also
mean that people are still interested in having a traditional watch. The potential of this
market can be ascertained from Koytcheva, (2017) who predicts the number of
wearable devices to be sold in 2020 to reach 14 million making the market worth 1
billion.

The chart below shows market share in 2015, of companies producing wearable track.
Moreover, Fitbit market share has reduced considerably from 38% in 2014 to 27% in
2015. This leads to a conclusion that consumers are showing preference for cheaper
fitness bands from Xiaomi and Smartwatches are also gaining strength (CNET, 2017).

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 Fitbit; 27%
Others; 34%

Samsung; 4%
Xiaomi; 15%
Garmin; 4%
Apple Smartwatch; 15%

Marketing Audit: Internal and External Analysis

Marketing Mix

Product

The fitness tracker tracks the number of steps, distance and calories burned. In
addition, it also includes a mobile app and a website where users can create their
account and log their food, activities, and weight. Fitbit operates while the wearer is
moving or being active. Its large display and long battery life makes it convenient for
consumers. There are added features such as; the tracker measures sleep quality,
become fashionable into a wristband and continually measuring the heart rate makes
Fitbit such a viable product to health aware consumers, it also connect to your phones
GPS. The wristband has also been upgraded to a watch with a color touchscreen.
(Fitbit.com, 2017).

Price

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The table below gives the prices of Fitbit products as well as its competitors. It is
worth mentioning that Fitbit products fall in medium price range and hence are
affordable.

Product Name Price

Fitbit Zip (lowest price) 49.99
Fitbit Charge 2 (most popular product) 129.99
Fitbit surge (highest price) 199.99
Xiaomi Band 25.1
Apple watch (starting price) 269

Place:

Fitbit products are mostly sold through retailers like Currys, Argos and Tesco as these
places are easily accessible. They are also sold online through their website and other
online retailers like Amazon and EBay. (Fitbit.com, 2017). Fitbit does not have it own
any physical outlet.

Promotion

Fitbit promotion approach is conservative in comparison to their competitors as they

rely heavily on word of mouth strategy. (Groves, 2014). The company realized that it
is weak in the international front hence started its global advertising campaign. It
spent eight figures on its global marketing campaign (Morrison, 2014). In the UK, the
company is adding an emotional element in its advertising by first time sponsoring
BBCs Sports Relief. The company is also involved with fitness communities like
Parkrun on regular basis (Hobbs, 2017).

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SWOT Analysis

Strengths: Weaknesses:
-First mover advantage -Lack of brand awareness as it has not invested
-Ability to innovate as it launch four new much in building its brand like Apple and
wearble devices in 2015 Samsung
-Products are light weight and easy to use -Fitbit only has activity trackers in their product
-Its websites and mobile application give it users portfolio as opposed to their competitors, Apple
a chance to keep a record of their activities and and Samsung who produce a wide range of
compare it with other users consumer products

Opportunities: Threats:
-It can improve on its software to capture and -Xiaomi with its cheap trackers and Apples
store more data and expand its data analytical watch are gaining popularity
capabilities to become expert in wellness -New entrants like traditional Swiss-made watch
- It can also enhance the customer experience by manufacturers like Mondaine will increase the
giving them dietary expertise and becoming one- competition
stop solution to their fitness
-It can sponsor more online influncer to talk
about their products and reach a wider audience

PESTLE Analysis
Political

The data recorded by wearable trackers can be sold to the third party without the
permission of the user. However, according to Fitbit representative, they have a
privacy policy in place, which does not allow them to do so without customer consent
(Walker, 2017). The wearable industry is exposed to infringements and intellectual
property theft. Fitbit owns multiple patents to protect their IP, but that the patents did
little to thwart efforts of competitive companies that breached their patents. In 2015, it
filed for infringement of three patent violations against Jawbone (IPWatchdog.com |
Patents & Patent Law, 2017).

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Economic

UKs economy is growing at a fast pace. However, in 2016 economic growth has
decelerated dropping to 2.3% in 2016 as compared to 2.9% in 2015 (Wallace, 2017).
Moreover, the currency plunged and the British pound devalued to historical lows. On
the other hand, unemployment rate improved. Although currency devaluation hurts
the local economy, companies such as Fitbit can capitalize on this by increasing their
exports and benefiting from the currency difference. (UK economy: GDP growth,
interest rates and inflation statistics, 2017). Even with a decrease in purchasing power
due to currency devaluation, the UKs disposable household income rose to a record
high in 2016 (Wallace 2017). With higher disposable household incomes, people can
afford to diversify and widen their purchases. The UKs economic climate proposes a
win-win situation for Fitbit as more people can afford owning the product and Fibit is
reaping exporting profits due to currency devaluation.

Socio-Cultural

The UK is beginning to embrace a paradigm shift in health consciousness. The

population is becoming increasingly health aware and fitness is playing a major role
in the Brits day-to-day lives. Hence, health-related products such as Fitbit are
enjoying increasing sales. In addition, the population is quite ahead in their
technological adoption of broadband, smartphones, mobile Internet, digital TV and
use of social networking (Arthur, 2017). It is vital to note that social media has fueled
the growth and adoption of healthier lifestyles as people enjoy sharing their fitness
regimes and associated products on their personal feeds (Euromonitor, 2017). This
phenomenon of instantaneous sharing makes Fitbit such an attractive product. The
company utilizes social media platforms to promote their product and build a
community around it.

Technological

The wearable technology is gaining momentum are investing into R&D and
introducing improved products like Fitbit and Apple. (Marshall,2017). Moreover, as
the companies grow, they benefit from technological economies of scale. Fitbit sales

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have plummeted in recent years enabling them to take advantage of economies of
scale. (Smarteranalyst.com, 2015).

Legal

Patents laws have been established to protect the technologies developed by

companies producing wearable fitness trackers. (IPWatchdog.com | Patents & Patent
Law, 2017). Fitbit clearly states in its website that it respects intellectual property
rights of others and their user should follow them.

Environmental

There is no data available about environmental factors such as limited natural

resource, waste disposal and recycling procedures affecting this industry..

Porters Five Forces Analysis

Bargaining Power of Suppliers

Bargaining power of suppliers is high as Fitbit has outsourced most of its production
to only one manufacturer called Flextronics. Hence it is highly dependent on this
supplier (Eadicicco ,2017).

Bargaining Power of Customers

Customers have low bargain power as Fitbit commands a big market in UK and the
demand is increasing. These consumers cannot directly influence the price of Fitbit
products, (Mintel, 2017; Groves, 2014)

Competitor Rivalry

Fitbit has two main competitors, Xiaomi and Apple. There are other players in the
market as well like Samsung and Garmin. Since the industry is growing at a very fast

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rate, there is room for growth of all brands. The competitive rivalry within the
industry is moderate.

Threat of Substitutes

The threat of substitute product is low. This is due to the fact that only trackers can
give you the ability to monitor your own performance.

Threat of New Entry

Wearable technology is capital intensive and time intensive as well. So a there can be
no surprise entrants. As mentioned previously, Xiaomi that has entered the market and
Mondaine is about to enter posing a medium level of threat to Fitbit. (CNET, 2017).

Market Assumptions

For the purpose of this plan, it is assumed that the economic conditions of UK remain
conducive to Fitbit i.e. the disposable income will remain stable or increase. The
pound will not become strong to hamper exports (Fitbit exported to UK from the
USA) and it will not trigger inflation. It is also assumed that patent will be obtained
on the new medical diagnostic technology. Moreover, the new product will be first of
its kind to benefit to capture a maximum number of sales and build the brand.
BREXIT will not immediately affect as, according to Woodford Investment
Management Ltd, (2017), the impact of BREXIT on British economy is uncertain.
The cost of manufacturing in the USA remains stable so that the new product can be
manufactured cheaply.

Marketing Objectives for New Product

Diabetic cannot enjoy fitness like Fitbit consumers as they have to track their glucose
levels throughout the day through a wearable medical device. Hence it is cumbersome
to wear two wearables. A wearable tracker that can measure blood glucose level can
serve their need.

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Our marketing objectives are

1. To command 5% of 4.5 million diabetic people in the first year

2. To create a brand awareness of our new product such that every 1 person out
of 5 know about our product

Marketing Mix for New Product

Product:

Fitbit, after a thorough clinical research, has developed a noninvasive technology to

monitor blood glucose level (Smith, 2015). This innovation in the product will be
supported by software whereby the user can keep a record of his glucose level and can
also export the results to his health care professional. The name of this product will be
Fitbit Sweet and the tagline will be Sugar can be fit.

Price

The product has additional cost of medical feature. In order to make profit, the Price
of this product will be kept at 160. It will have the highest price among our fitness
band category. Fitbit Force 2 band is priced at 129.99.

Place

It will be sold at all of our traditional retail outlets like Currys, Tesco, Argos as well
as sold online through its website and Amazon and EBay (Fitbit.com, 2017).

Promotion

As consumer has yet to learn about our product and form an opinion of it, a credible
source will be persuasive. Scott Allan is young Scottish professional football player
who was diagnosed with diabetes at an age of three but still became a success. Scott
Allan will be motivational for our diabetic target audience (Celticfc.net, 2017).

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Promotional Campaigns

1. Digital Campaign on social media, website, and mobile application

One week before the commercial launch of the product, Fitbit will start its digital
campaign. Scott Allan will appear in the Digital Campaign, which will feature
innovative posts to engage the audience. He will also endorse the product on social
media. Fitbit will not hire Scot Allan as a brand ambassador as it would be very
expensive. The objective of this campaign is to persuade people with diabetes to
become active and control their illness by using this fitness band. The approximate
cost of his endorsement and virtual appearance will be 10,000 (Strand, 2017).

2. Advertisement in Health Magazine

Fitbit will feature advertisement in UKs top selling health magazines. According to
Abc.org.uk (2017), UKs top 5 selling health magazine are Slimming World
Magazine, Prima, Weight watcher Magazine, Womens Health and Mens Health. The
objective is to create awareness of new fitness band in the consumers. The average
cost of one advertisement is 5000. Fitbit will feature in all 5 magazines at cost of
25000. This advertisement will only be featured in the first month
(Slimmingworld.co.uk, 2017).

3. Diabetes Week

According to Diabetes.org.uk (2017), the Diabetes week 2017 will be held from
Sunday 11 June to Saturday 17 June 2017. Fitbit will collaborate with the Diabetes
Week 2017. Their aim is to create awareness, as according to their estimates 25
percent of people dont understand the dangers posed by diabetes. Diabetes UK is a
charity so Fitbit will donate a 10 per Fitbit Sweet sold during this week with the
maximum amount to be 10,000.

4. Competition for Consumers

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Fitbit will launch a competition for diabetic consumers to complete certain numbers
of step in a month using our Fitbit Sweet and they will get a reimbursement of their
purchase. This campaign will be launched after 6 months. The objective of this
promotion is to get the consumers more involved with the product and motivate them
towards fitness. A maximum of 1000 bands will be reimbursed so that cost comes out
to be 100,000.

5. Engaging the Retailers:

Fitbit will contact the retailers one month before the launch and make them aware of
the advantages of the new product. The objective is to enable them to prepare for
change. The company will offer an incentive of 1% cash back to our retailers. Retail
price is 130 so 1.3 will be returned to them per fitness band sold. A total of 10,000
bands will be sold in the first year so the total cost would be 13,000.

Month New Activity Objectives Duration Cost

March Engagement with To enable them to prepare for change 13 Months 13,000
Retailers
Digital Campaign To persuade diabetic to become active and 13 Months 10,000
control their illness by using this fitness band
April Advertisements in To create awareness of new fitness band in the 1 Month 10,000
(Launch) health magazines consumers
May No New Promotion
June Diabetes Week To create awareness of diabetes and our 10,000
product
July No New Promotion
August No New Promotion
September No New Promotion
October Competition for To get the consumers more involved with the 6 Months 100,000
Consumers product and motivate them towards fitness
November No New Promotion
December No New Promotion
January No New Promotion
February No New Promotion

March No New Promotion

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