Fitbit IMC Plansbook

fitbit

PREMIER UNDERGRADUATE MARKETING ASSOCIATION

TABLE OF CONTENTS 02 03 05 06 07 09 11 13 14 15 16

EXECUTIVE SUMMARY SITUATIONAL ANALYSIS SWOT OBJECTIVES TARGET MARKET MARKETING STRATEGIES MARKETING TACTICS MEDIA FLOWCHART BUDGET MEASURES OF SUCCESS SOURCES

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EXECUTIVE SUMMARY SITUATIONAL ANALYSIS

Fitbit was founded in 2007 as a California-based company that focuses on wearable technology that pertains to fitness. While many firms have tried to gain market shares for wearable technology through smartwatches, Fitbit continues to have success in the market with increased sales. Since 2010, Fitbit has sold more than 38 million devices worldwide, and has over 16 million active users. Fitbit shipped 5.7 million units worldwide in the second quarter of 2016, while Apple shipped 1.6 million wearable devices worldwide in the same period.�

SWOT ANALYSIS

Fitbit has been one of the first firms to sell wearable technology in the market. They have consolidated its product’s identity as one of the primary wearable technology for fitness.

Fitbit also has one of the most popular mobile apps that provides enhanced utility for Fitbit users. The drawbacks of Fitbit is the lack of GPS and waterproof functions. The possible opportunities for Fitbit is through partnerships with Adidas. The threats of Fibit are Xiaomi and Apple due to their competitive shares in the market.

OBJECTIVES

The primary objective is to increase wearable technology amongst US Gen Xers by 5% (target: 19.8 -> 24.8%) by Q4 2020 and increase device shipments worldwide by 2% (target: 13% -> 15%). The final goals is to reach 30 million units sold by Q4 2018. Fitbit intends to achieve 80% retention of new users by Q4 2018 and user engagement of at least once per week.

TARGET MARKET The target consumer is the Generation X audience, ages 34-50, both men and women.

These consumers will be middle class and interested or already invested into an active lifestyle, as they are more likely to be able to afford the product and be interested in joining the FitBit community. This age group will be beneficial as the audience will be wary of possible cardiovascular disease and more likely to turn to FitBit as a solution.

MARKETING STRATEGIES & TACTICS

The Fitbit Alta HR and Charge 2 are the industry standards for fitness bands, and will be the main products pushed in our marketing plan. Our marketing tactics will appeal to the fitness industry through our use of emotional and personal connection with the consumer.

EVALUATION OF PERFORMANCE

We will use both quantitative and qualitative analysis to evaluate our performance of our marketing tactics and strategies. Our quantitative analysis includes promotional codes, affiliate links, and YouTube/Google analytics to track our consumers. Our qualitative analysis includes the use of surveys to understand audience perception of the products and company as a whole.

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SITUATIONAL ANALYSIS Fitbit is a California-based company that develops and manufactures compact, wireless wearable technology for the health and fitness industry. Founded in 2007, the company has gained attention due to its rapid growth and success. In a time span of five years – from 2010 to 2015 – Fitbit’s revenue increased from just over 5 million U.S. dollars to more than 1.8 billion U.S. dollars. The health and fitness wearable devices market is one of the most promising segments of the wearable industry. In 2014, 14 million health and fitness trackers were sold worldwide.

Fitbit’s first device, the Fitbit Classic, was released to the consumer market in 2009, and had limited features compared to the most recent models. The Fitbit Classic only kept track of steps, distance, calories burned and activity intensity. In order to stay competitive in the fast-growing wearable technology industry, the company released multiple models and features throughout the years. As of 2017, Fitbit had six models in the market that vary in price range. The Fitbit Zip is the least expensive with a suggested retail price of 59.95 U.S. dollars. The Fitbit Ionic is the most expensive with a suggested retail price of 299.95 U.S. dollars.

With the release of the Apple Watch in 2015, many thought that Apple would reinvigorate the wearable technology market and shift consumer focus towards higherend smart-watches rather than the mainstay and pillar of the wearables industry, the fitness and activity band. However, widespread adoption of the Apple Watch and similar devices failed to materialize, leaving the fitness band as the leading wearable in use within the US. Since 2010, Fitbit has sold more than 38 million devices worldwide, and has over 16 million active users. The company is amongst the leading companies in the wearable market. Some of Fitbit’s competitors are well-known companies such as Jawbone and Xiaomi, and technology giants such as Apple and Samsung. Fitbit shipped 5.7 million units worldwide in the second quarter of 2016, while Apple shipped 1.6 million wearable devices worldwide in the same period.

Millennials, especially older ones, are the most likely age group to use wearables. By the end of 2017, nearly one in three US internet users ages 25 to 34 will be wearable users, followed closely by 18- to 24-year-olds and 35- to 44-year-olds. Younger

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boomers are about half as likely to use wearables as 25- to 34-year-olds, while fewer than one in 10 internet users over 55 are wearable users.

Penetration will rise by just a point or two among the older groups by 2020.

In terms of gender, the US adult wearables audience skews female. Men will gain slightly more share of the market by 2020. Several years ago, the tilt was in the other direction, but the healthand fitness-oriented devices that dominate the market tend to be popular with women.

According to research from Deloitte, 17% of US internet users owned or had access to a fitness band in 2016. That was up from 10% in 2015.

Despite the tripling of smartwatch penetration over the same period, the more advanced devices were still 5 percentage points behind.

US ADULT WEARABLE USER PENETRATION,

BY AGE, 2017 & 2020 18-24

29.8% 36.9%

25-34

32.4% 38.2%

35-44

27.2% 31.9%

45-54

16.1% 20.0%

55-64

7.5% 9.0%

65+

2017

7.1%

2020

8.6%

Total

20.4% 24.3%

SOURCE: EMARKETER, DEC. 2016

According to August 2016 research from the Interactive Advertising Bureau (IAB) conducted by Maru/VCR&C, 24% of US adult internet users had a wearable health tracker. By comparison, 13% owned a smart watch, 10% had a VR headset, and 7% had smart glasses. Branding Brand polled US iPhone owners ages 18 to 65 the same month and found that 11% also had an Apple Watch.

Based on these findings, we see sustained opportunity specifically for Fitbit’s line of activity trackers with heart rate monitoring. This puts us in direct contention with Garmin and the Chinese electronic company Xiaomi. We’ll also include Apple since they are the leading smartwatch, but the former two are our main competition within the fitness band market.

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SWOT CHARGE 2 & ALTA HR STRENGTHS

WEAKNESSES

• Leading, established brand within the

• No built-in GPS.

wearables market.

• Not swim proof.

• Number one mobile app by a large mar-

• Lacks international presence.

gin (20.8 monthly unique users.)

• No third-party apps or development.

• Consolidated personal health info.

• Seamless integration amongst devices.

• Designers accessories.

OPPORTUNITIES

THREATS

• Partnership with Adidas.

• Xiaomi has increasing market share in Asia.

• Partnership with Tory Burch.

• The Apple Watch will continue to be a threat due to Apple’s presence in tech, but current trends suggest smartwatches will not

AMOUNT THAT INTERNET USERS IN NORTH AMERICA WOULD BE WILLING TO SPEND ON A SMART WATCH, BY GENDER, JULY 2016 <$100

widely be adopted.

IMPORTANT WEARABLE DEVICE FEATURES ACCORDING TO US INTERNET USERS, NOV. 2016

45% 30%

$100-$200 29% 29%

56%

$200-$300 15% 18%

$300-$500 6%

12%

$500-$1K 7%

MALE

FEMALE

$1K+

tracks heart rate

2% 4% SOURCE: FIRST INSIGHT, “CONSUMER SMARTWATCH REPORT FINDINGS,” SEP. 20, 2016

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OBJECTIVES BUSINESS • Increase wearables penetration amongst US Gen Xers by 5%.

•

TARGET: 19.8%

24.8%

• Increase device shipments worldwide by 2%.

•

TARGET: 13%

15%

• Reach 30 million units sold by Q4 2018.

WEARABLE DEVICE BRAND THAT US INTERNET USERS ARE LIKELY TO PURCHASE FIRST, NOV. 2016

COMMUNICATIONS

APPLE

• Increase FITBIT’S share of US Internet users

FITBIT

who said they were likely to buy a specific brand

SAMSUNG

wearable first within the next year (currently tied

GOOGLE

• Achieve 80% retention of new users by Q4

LG

4%

2018.

GARMIN 3%

• User engagement at least once per week.

NIKE 2% SONY 2%

SOURCE: YOUGOV, DEC. 19, 2016

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22% 17%

5%

with Apple at 22%).

22%

TARGET MARKET Our target audience will be males and females, Gen Xers, ages 34-50. These individuals are in the “midlife parent” stage, and want to stay healthy as they transition into older years as they are more likely to be at risk for heart disease and other cardiovascular diseases. We want to target the middle class who are engaged in an active lifestyle and want to keep track of their health, as they are more likely to be interested and able to afford the product.

US ADULT WEARABLE USER SHARE, BY AGE, 2017 & 2020 5.2% 5.9%

5.8% 5.9%

13.8%

13.5%

65+ 55-64 45-54 23.3%

23.1% 35-44 25-34

According to December 2016 research from 31.4% 31.5% 18-24 AYTM Market Research, more than two-thirds of US internet users surveyed said they were at least somewhat concerned with health and fitness, and 20.3% 20.2% 2017 more than two in five had made at least one health2020 SOURCE: EMARKETER, DEC. 2016 or fitness-related purchase in the past year. Among that group, AWARENESS, PURCHASE INTEREST* AND OWNERSHIP OF SELECT WEARABLE more than half (57.9%) had made a tech purchase DEVICES AMONG US INTERNET USERS, related to health and fitness. Wearables were the AUG. 2016 SMART WATCH most common such purchase, followed by workout equipment. Among all internet users surveyed, just under a third said they were at least somewhat likely HEALTH TRACKER to buy health- or fitness-related technology within the next year—again, with wearables as the most likely purchase, followed by workout equipment.

97%

27%

13%

94%

32%

24%

VR HEADSET

76% 30% 10%

SMART GLASSES 85% 21% 7%

AWARENESS

PURCHASE INTEREST*

OWNERSHIP

*VERY/SOMEWHAT INTERESTED AMONG RESPONDENTS WHO ARE AWARE OF DEVICE BUT DO NOT OWN SOURCE: INTERACTIVE ADVERTISING BUREAU (IAB), “THE INTERNET OF THINGS” CONDUCTED BY MARU/VCR&C, DEC. 15, 2016

According to research conducted by GfK in summer 2016, nearly half of US internet users ages 20 to 39 used digital means to monitor or track their health and fitness, including wearables as well as online and mobile apps. Fitness tracking was also popular with a quarter of teens and 40-somethings surveyed. The main reason for doing so was to maintain or improve

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physical fitness (55%), followed by motivation to exercise (50%). Search trends suggest the online audience interested in products including lululemon activewear and Fitbit wearable fitness trackers rose by 39% between September 2015 and September 2016, according to Hitwise.

Another â&#x20AC;&#x153;clean livingâ&#x20AC;?-oriented audience, one that searched for things like CrossFit gyms and Tough Mudder competitions, increased by 26% over the same period. These audiences are potentially lucrative: According to Hitwise, those with annual household income of at least $100,000 made up the largest share of visitors to Fitbit.com in the 12 weeks ended December 31, 2016. Nearly three-quarters of these visitors were women, and a plurality were ages 35 to 44.

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MARKETING STRATEGIES POSITIONING STATEMENT:

“THE FITBIT ALTA HR AND CHARGE 2 ARE THE INDUSTRY

STANDARDS FOR FITNESS TRACKERS. THEY’RE SLEEK AND FASHIONABLE; PACKED WITH EVERYTHING YOU’D NEED TO LEAD A HEALTHY LIFESTYLE ALL AT A PRACTICAL PRICE POINT.”

1. Target the fitness industry and those who are willing to invest/are already invested in their physical health whilst putting most of our effort into targeting Generation X. • Great gift for the holidays! “New Year’s Resolutions” “Get one for your dad!”

• SEO for health-related searches.

• Personal health goals - “ab workouts”, “vegan diets”, “supplements” • Competitive fitness - “Tough Mudder”, “CrossFit gyms” 2. Emphasize price in comparison to smartwatches. Then, list features that come with the Alta HR and Charge 2. Appeal to middle age adults.

3. Emphasize strength of our fitness app. Users don’t have to own a fitbit in order to use the app for tracking calories, managing meals, recording weight, and more.

By getting more users on the app, we can then do a promotion for purchasing fitbits.

The wearables market has not reached most US adults, and in late 2016 as eMarketer and other firms released lower-than-expected shipment estimates, narratives of a failed device market emerged. But millions of US consumers do use wearables, and the continued focus on health-and fitness-oriented devices suggests there is also a focused health-and fitness-conscious audience reachable through these devices.

Fitbit is the most recognizable non-smartwatch wearable brand, and we plan to capitalize on this point. Many Americans feel that $200 is the maximum amount they’d pay for a wearable device. The Apple Watch Series 3 starts at $329, whilst Fitbit’s own smart watches start at $249. So, we’ll focus on promoting the products in Fitbit’s line that have heart rate tracking capabilities (an important feature for consumers), but fall within the consumer surveyed price range of $200. The Alta HR and the Charge 2 are the two devices that meet these criteria.

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Since Fitbit is the leading fitness wearable in the industry, our campaign will focus less on visibility and competitive advantage. Instead, we will focus on introducing more consumers into the wearables market, with Fitbit leading them in as the â&#x20AC;&#x153;gatewayâ&#x20AC;? brand. By growing the market as a whole, Fitbit will in turn receive increases in company growth as well because it is the established leader in the wearables market. In addition, health and fitness is an industry that will never fail to lack a consumer base since for many consumers health and fitness is a lifestyle and there is an increasing societal trend suggesting individuals are becoming more health conscious.

So, to reiterate, we want convert individuals who are looking to become and/or already invested not just in health and fitness products but in living a healthy life in general. Generation X adults will be a primary focus for us since it is a demographic that has shown that it can widely adopt mobile/smartphone technologies, but has not had similar success in adopting wearables

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MARKETING TACTICS TV ADVERTISEMENTS

• “Gift vitality this holiday season” • New Year’s resolutions: Take advantage of the holiday rush as shoppers begin to consider which gifts to purchase. The new years also approaches and many people seek to make new resolutions, particularly those that pertain to health.

• Inspirational stories of individuals overcoming health obstacles with exercise and fitbit: inspirational stories allowing FitBit to have an interpersonal approach to consumers and demonstrate the practicality and potential of Fitbit aiding individuals in their goals to achieve healthy lifestyles.

BILLBOARD ADVERTISEMENTS: • “Commit with Fitbit” • Maintain a healthy habit with fitbit; commit to a goal and a habit with fitbit.

Short and catchy slogans.

• “Join the Fitbit Split”(this idea may be discarded) • “Get that Fitbit Grit” (this idea may be discarded)

SEARCH ENGINE OPTIMIZATION (SEO): APPROXIMATELY 4-MONTH STRATEGIC TARGETING FOR EACH GROUP • Target consumers who make health and fitness related web searches • Target consumers who make web searches related to CrossFit • Target consumers who make web searches related to competitive fitness i.e.

CrossFit, Tough Mudder, IronMans, Marathons, 5Ks, etc.

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INCREASED SOCIAL MEDIA PRESENCE • “The Fitbit Challenge” • Set challenges for active fitbit users to meet certain challenging fitness goals; These challenges will raise awareness via hashtags and social media posts (i.e.

Instagram pictures): • Earn badges/ranks to show off to your peers about your fitness achievements. Create competition and increased usage of fitbits amongst peers • Consumers may potentially earn points from their achievements and redeem them for exclusive fitbit merchandise to incentivise them further • Engage users on Twitter • Personal responses and feedback to consumers about the Fitbit product • Social Media Sweepstakes • Use hashtags to choose randomized winners to win a free Fitbit via a lottery system (#commitwithfitbit) BUILD B2B POTENTIAL PARTNERSHIPS • Lululemon (fitness active wear) • Adidas, Puma (fitness active wear) • “Biggest Loser” sponsorship • Show individuals using the product to aid with their progress of weight loss.

Show practicality and potential of the product • “Extreme Weight loss” sponsorship • This show is a more interpersonal approach to showing how an individual uses his or her fitbit to fit his or her unique needs, workouts, and schedule.

• Iconic social media fitness ‘gurus’ • Youtubers • Instagram INFLUENCER MARKETING • CrossFit Athletes • Professional Athletes (Current and former) • I.E. Kobe Bryant • Gift free Fitbits to people with large followings: • Provide free fitbits to social media figureheads to popularize the product to the social media followers; raise awareness of the product and differentiate the services/ capabilities of the product from other competitors.

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with fitbit ”

TV ADS

new years resolution

“ life

SEO

with fitbit ”

inspirational stories

BILLBOARDS ADS

health and fitness

crossfit fitness

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competitive fitness

“ commit with fitibit ” “ life with fitbit ” ry fe

extreme weight loss

ja a nu

biggest loser

r

puma

mb

be

adidas

de m ce

lululemon

B2B PARTNERSHIPS

d

EXECUTIONS

sweepstakes

the fitbit challenge

SOCIAL MEDIA

competitive fitness

crossfit fitness

health and fitness

SEO

“ commit with fitibit ” “ life with fitbit ”

BILLBOARDS ADS

inspirational stories

“ life

new years resolution

TV ADS

EXECUTIONS

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r eb

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il pr y ma j

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u ug

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be o ct

be

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mb d

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MEDIA FLOWCHART

u br ar y ma rc h ap ril y ma

14

12%

14%

3.5%

3.5%

5%

11%

5% 2%

5%

39%

Television

Ou t -of-Home

Radio

Digi ta l

Social

Par tnerships & in-store

Guerilla

Production

Commission

Contingency & Measures of Success

BUDGET

MEASURES OF SUCCESS QUANTITATIVE Our evaluation of performance will come from various quantitative resources, mostly used to track which marketing strategies and channels have been the most successful. To begin with, our influencer marketing will be evaluated from affiliate links and discount codes. This will allow us to track which influencers have had the most impact on our targeted consumers. Additionally, our TV Advertisements will be tracked using promotional codes that appear on the TV commercials.

This will be used and compared with the price spent on ads and the money made from sales to form an estimate of the average cost of customer acquisition.

Furthermore, YouTube Analytics will allow for tracking of promotional videos and which target audiences are watching our videos, which ones are clicking, how long they are watching, etc. Perhaps most importantly, our Fitbit App will be monitored by downloads, daily users, monthly users, etc. These quantifiable numbers will allow us to see which streams, channels, and strategies are best in our marketing tactics, and allow us to narrow down on future channels in the future.

QUALITATIVE While it is important to gain customers, sales, app users, etc, is is arguably just as important that we gain recognition for our high quality products and company vision as a whole. In order to do this, we will have surveys implemented throughout our channels to allow for an idea of how our audience views us as a company. Our surveys can be found in our application along with our other channels. To give users an incentive to complete the survey, we may give them a promotional discount to get more survey competitions. By doing this, we can see certain trends, along with audience perceptions of our strengths and weaknesses.

As a result, the surveys will allow us to notice more quantitative numbers and conclude if we have achieved benchmarks, such as 80% retention of new users by Q4 of 2018.

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SOURCES Fitbit. “Fitbit Inc. Revenue from 2010 to 2016 (in Million U.S. Dollars)*.” Statista - The

Statistics Portal, Statista, www.statista.com/statistics/472518/fitbit-revenue/, Ac

cessed 28 Nov 2017 Fitbit. “Number of Fitbit Devices Sold Worldwide from 2010 to 2016 (in 1,000s).” Statista

- The Statistics Portal, Statista, www.statista.com/statistics/472591/fitbit-devices

sold/, Accessed 28 Nov 2017 Fitbit. “Number of Active Users of Fitbit from 2012 to 2016 (in Millions).” Statista - The

Statistics Portal, Statista, www.statista.com/statistics/472600/fitbit-active-users/,

Accessed 28 Nov 2017 Fitbit. “Manufacturer’s Suggested Retail Price (Msrp) of Fitbit Devices in The United

States In 2017 (in U.S. Dollars).” Statista - The Statistics Portal, Statista, www.

statista.com/statistics/472577/fitbit-devices-retail-price/, Accessed 28 Nov 2017 Fitbit. “Number of Fitbit Devices Sold Worldwide from 2010 to 2016 (in 1,000s).” Statista

- The Statistics Portal, Statista, www.statista.com/statistics/472591/fitbit-devices-

sold/, Accessed 28 Nov 2017 GfK. “Forecast Unit Sales of Wearables Worldwide by Category from 2014 to 2016

(in Millions).” Statista - The Statistics Portal, Statista, www.statista.com/

statistics/413225/wearables-worldwide-unit-sales-forecast/, Accessed 28 Nov 2017 IDC. “Market Share of Wearables Unit Shipments Worldwide by Vendor from 1q’14 to

2q’17.” Statista - The Statistics Portal, Statista, www.statista.com/statistics/435944/

quarterly-wearables-shipments-worldwide-market-share-by-vendor/, Accessed 28

Nov 2017 IDC. “Wearables Unit Shipments Worldwide by Vendor from 1q’14 to 2q’17 (in Millions).”

Statista - The Statistics Portal, Statista, www.statista.com/statistics/435933/

quarterly-wearables-shipments-worldwide-by-vendor/, Accessed 28 Nov 2017

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