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Fitbit Assignment EBE03 02
Marketing for E&BE (Rijksuniversiteit Groningen)
StudeerSnel wordt niet gesponsord of ondersteund door een hogeschool of universiteit
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Fitbit Report
26-02-2018
Marketing for E&BE
Celina Solstad Høvik
Rosanne Jonkers
Eileen Kremer
Julia Oude Hendriksman
Group 03
Subgroup 02
Tutorial teacher: Mr. Berger
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Table of contents
Introduction...........................................................................................................................................2
Market...................................................................................................................................................3
Value proposition...................................................................................................................................3
Marketing mix........................................................................................................................................4
Product...............................................................................................................................................4
Price....................................................................................................................................................5
Place...................................................................................................................................................5
Promotion...........................................................................................................................................5
SWOT-analysis of Fitbit..........................................................................................................................6
Strengths............................................................................................................................................6
Weaknesses........................................................................................................................................6
Opportunities......................................................................................................................................6
Threats...............................................................................................................................................7
Microenvironment.................................................................................................................................7
Competitors........................................................................................................................................7
Customers...........................................................................................................................................8
Macroenvironment................................................................................................................................9
Demographic......................................................................................................................................9
Economic............................................................................................................................................9
Natural...............................................................................................................................................9
Technological....................................................................................................................................10
Political.............................................................................................................................................10
Cultural.............................................................................................................................................10
Competitive strategy...........................................................................................................................10
Conclusion............................................................................................................................................11
Strategic advice................................................................................................................................11
References...........................................................................................................................................12
Appendix 1...........................................................................................................................................13
Appendix 2...........................................................................................................................................19
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Introduction
This report is about Fitbit. Fitbit is a company based in California that develops wireless
wearable devices for the health and fitness industry. The company is founded in 2007 by Eric
N. Friedman and James Park. They realized that sensors and wireless technology had
improved to a level where they could bring great experiences to health and fitness. They
started to create a wearable product that would change the way people move. Nowadays,
Fitbit designs products that fit seamlessly into peoples’ lives and inspires them to have a
healthy and active life. Their vision is: “We are a passionate team dedicated to health and
fitness who are building products that help transform peoples’ lives. While health can be
serious business, we feel it does not have to be. We believe you are more likely to reach your
goals if you are encouraged to have fun, smile and feel empowered along the way.”
(www.fitbit.com)
This report consists an analysis about Fitbit, which is explained by the value proposition of
Fitbit, a SWOT-analysis, the marketing mix of Fitbit, the microenvironment and
macroenvironment where Fitbit operates in and eventually the competitive strategy that Fitbit
uses.
The first part of every subject in this report is about the underlying theory to be able to give
Fitbit reasonable advice and to understand their particular situation. Secondly, this theory will
be adjusted to Fitbit. Lastly, there will be a conclusion with the recommendation for Fitbit.
The aim of this report is to give Fitbit strategic advice concerning marketing. In order to
achieve this, the overall research question will be answered, which is: ‘Which marketing
strategy should Fitbit use in order to stay ahead of the competition?’
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Market
A market is the set of all actual and potential buyers of a product or service. The buyers share
a particular need or want that can be satisfied through exchange relationships [CITATION
Phi17 \p 33 \l 1043 ]. The market in which Fitbit operates is the market for ‘health and fitness
wearable devices’.
Fitbit operates well in this market. Statistics about Fitbit state that there are 25 million active
users and 50,6 million registered device users (www.expandedramblings.com).
Besides that, the company has more than 20 million people using ‘Feed’ within the Fitbit app.
Furthermore, their app remains the number one health and fitness app on both iOS and
Android in the United States (www.investor.fitbit.com).
In 2017, Fitbit’s market share is 19.2%. The biggest competitor for Fitbit is Xiaomi, which is
raising and, thus, gained a market share to 15.2% and a shipping of 5.2 million devices. Fitbit
is number one in their market, because Xiaomi is still not outraising Fitbit with a 19.2%
market share and 6.5 million shipped devices. However, Fitbit’s market share decreased by
9.8 percentage points, because there was a decrease in shipped devices of 1.9 million
(www.venturebeat.com).
Value proposition
Fitbit has the task to manage their marketing. Marketing management is defined as the art and
the science of choosing target markets and build profitable relationships with them. A part of
marketing management is the value proposition, which is defined as the set of benefits or
values the company promises to deliver to consumers to satisfy their needs. [CITATION
Phi17 \p 35 \l 1043 ] Applying this to Fitbit’s situation leads to the mission of its founders,
Eric N. Friedman and James Park. Their mission is to empower and inspire people to live a
healthier, more active life. Fitbit designs products and experiences that fit seamlessly into
people’s lives, so they can achieve their health and fitness goals, whatever they may be
(www.fitbit.com).
It is important for a company to design strong customer value propositions that give them the
greatest advantage in their market. The value that Fitbit offers the customer is that Fitbit’s
devices track every part of people’s days – including activity, exercise, food, weight, and
sleep. This helps people to find their fit, stay motivated, and see how small steps make a big
impact. (www.fitbit.com)
Another customer value is that Fitbit created a whole set of products that work
seamlessly with each other and with peoples’ budgets, favorite apps and their goals. The
reason for this whole set of products is that everyone’s approach to fitness and a healthy
lifestyle is different.
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Marketing mix
The company’s marketing strategy outlines which customers it will serve and how it will
create value for these customers. The marketing mix is a mix of important tools that a
company uses to implement its marketing strategy. The marketing mix tools are classified into
four broad groups, called ‘the four Ps of marketing’: product, price, place, and promotion.
Product
The first tactical marketing tool is product. This tool is defined as the goods-and-services
combination the company offers to the target market. To deliver on its value proposition, the
company must create a need-satisfying market offering. [CITATION Phi17 \p 38 \l 1043 ].
Fitbit offers eleven different products. All those products can be used for different targets,
which means that people can choose the product that fits them the most. Fitbit has products
for starters, but athletes can use their products as well. Furthermore, Fitbit offers wireless
headphones and a smart Wi-Fi-scale. There is a lot of variety among the products that Fitbit
offers.
Fitbit
Zip
Fitbit
One
Fitbit
Flex
Fitbit Flex 2
Fitbit
Charge
Fitbit Alta
Fitbit
Charge HR
Fitbit
Charge 2
Fitbit
Blaze
Fitbit
Surge
Price
$59.95
$99.95
$99.95
$99.95
$129.95
$129.95
$149.95
$149.95
$199.95
$249.95
All-day activity tracking
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
yes
Sleep Monitoring
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
yes
Call notifications
No
No
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Text notification
No
No
No
No
No
Yes
Yes
Yes
Yes
yes
Music control
No
No
No
No
No
No
No
No
Yes
yes
Heart rate monitoring
No
No
No
No
No
No
Yes
Yes
Yes
yes
Battery life
4-6
months
10 – 14
days
5 days
5 days
7 – 10
days
5 days
5 days
5 days
5 days
7 days
Water resistant
Yes
Yes
Yes
Yes
(swim proof)
Yes
Yes
Yes
Yes
Yes
yes
Table 1
The different characteristics of each Fitbit wristband are shown in the table above. The reason
that there are only ten products in this table is that the 11th product, the Fitbit Iconic, is just
added to the assortment. The Fitbit Iconic includes all the characteristics in the table, but it
distinguishes itself because it includes Bluetooth headphones. As a consumer, it is convenient
to know the differences between the products, and this table gives the consumer a quick
overview about the products. This makes it easier for consumers to decide and oversee the
different products.
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Price
The price is the amount of money customers have to pay to obtain the product. Fitbit offers
different prices for their products. [CITATION Phi17 \p 78 \l 1043 ] Due to this, Fitbit
provides wireless wristbands to a broad field of customers. Additionally, Fitbit provides sales
and discounts occasionally. These discounts attract different customers who probably would
not purchase a Fitbit device for full price. Fitbit’s prices range from $59.95 (Fitbit Zip) to
$349.95 (Fitbit Iconic). The prices of all the products are shown in Table 1 above.
Place
The place includes company activities that make the product available to target consumers.
Place includes assortments, locations and transportation among other things.
The headquarter is located in California, United States of America. There are
eight other offices, which are located in Boston, Dublin, Hong Kong, Shanghai, Seoul, Minsk,
New Delhi, and Tokyo. Fitbit is easily accessible, because of all these different retailers all
over the world. Fitbit expanded their target customers from only the U.S. population to
shipping worldwide.
Fitbit devices can be bought both in stores and online. Fitbit has authorized
retailers all over the world. The specific retailers for every country can be found in Appendix
1. Besides the retailers, Fitbit devices can be ordered through their original channel:
Fitbit.com. Moreover, this channel offers free shipping on orders above $65, a 45-day money
back guarantee, and a one-year limited warranty.
In short, Fitbit has two different distribution channels:
Promotion
Promotion refers to activities that communicate the merits of the product and persuade target
customers to buy it. The promotional purpose of Fitbit is to inform potential customers. Fitbit
hires a Chief Marketing Officer, Tim Rosa. Rosa is responsible for brand and product
marketing, partnerships, advertising and media, PR and events, Fitbit.com, premium services,
CRM, customer acquisition, engagement, and monetization. (www.fitbit.com)
Fitbit promotes their products through Fitbit.com, so it is important to keep
this website professional and innovative. Furthermore, they advertise in magazines, in TVcommercials, and on social media. Fitbit also partners with influential people as Barack
Obama and Joel McHale, which influences customers due to the fact that they are well-known
by the consumers.
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SWOT-analysis of Fitbit
Managing the marketing function begins with a complete analysis of the company’s situation.
The SWOT analysis should be conducted, by which the company’s overall strengths,
weaknesses, opportunities, and threats are evaluated. In this section the internal (SW) and
external (OT) parts of the SWOT analysis are discussed: strengths, weaknesses, opportunities
and threats.
Strengths
The strengths of a company are internal capabilities that may help a company reach its
objectives [CITATION Phi17 \p 80 \l 1043 ]. For Fitbit one of the strengths is that the
products are comfortable to use, because the device is wireless. This makes it easier for
consumers, because they there are no strangles attached literally.
Besides that, the products function for different circumstances. For instance,
for swimming, running, and cycling. The products can be used for every active person,
ranging from starters to professional athletes. Finally, the devices have a long battery life,
which means that customers can take them wherever they want without struggling with low
battery.
The business Fitbit has a high market share, which shows a high level of awareness,
reputation and credibility for the brand. Another strength is global expansion, which leads to
easier access to the customers. Furthermore, they have partnerships with wellness and fitness
organizations, which increases the brand credibility.
Weaknesses
The weaknesses are internal limitations that may interfere with a company’s ability to achieve
its objectives [CITATION Phi17 \p 80 \l 1043 ]. For Fitbit one of the weaknesses is that the
display is relatively small. This may lead to a loss of customers if Fitbit does not adjust the
customer needs. Furthermore, the Step Counter is not the most accurate and each model
requires a different charger, so customers have to charge their devices with different chargers
which is inefficient (www.community.fitbit.com).
The business Fitbit has a lack of brand recognition, because they are not so
well-known as Apple for instance. Fitbit is not the brand that first pops up in peoples’ heads
when they think of wireless devices. Another weakness of Fitbit is the relative pricing. If a
customer wants two more days battery life, the price of the device is $50 higher.
Opportunities
The opportunities are external factors that the company may be able to exploit to its advantage
[CITATION Phi17 \p 80 \l 1043 ]. The first opportunity for Fitbit is to make people more
aware the importance of a healthy lifestyle, by encouraging them to become healthier and,
thus, use Fitbit devices.
Another opportunity is to include the customers into their marketing, for
instance through social media. Adjust the devices that people can report their progress and
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their activities from their Fitbit device on social media, which shows that Fitbit involves their
customers.
They can become partners with healthcare centers, because their device
detects heartrate and other activities. Patients with heart problems, for instance, can be
examined through a Fitbit device and, thus, the doctors can keep track of the lifestyle of these
people.
Furthermore, Fitbit’s wearable devices are not recyclable yet. So, they can
improve their environmental importance, by making the wearable devices recyclable.
Threats
The threats are the current and emerging external factors that may challenge the company’s
performance [CITATION Phi17 \p 80 \l 1043 ]. For Fitbit the competition could be a serious
threat, because the wireless device is an upcoming product, which makes it interesting for
competitors to enter this market. Especially Xiaomi is a threat, because they have gained
market share, and have increased their shipments. (www.theguardian.com)
The improving technology can be a threat as well, because it could be
dangerous for Fitbit if a new technology was developed in which a wireless device is not
needed anymore. It could be also an opportunity in which Fitbit can improve their products
and make them more attractive.
Microenvironment
The marketing environment consists of two different environments. The microenvironment
and the macroenvironment. In the microenvironment there are actors close to the company
that affect its ability to serve its customers – the company, suppliers, marketing
intermediaries, customer markets, competitors, and publics[CITATION Phi17 \p 92 \l 1043 ].
The focus in this report will be on competitors and customers.
Competitors
The marketing concept states that, in order to be successful, a company must provide greater
customer value and satisfaction than its competitors do. Since portable consumer electronic
devices have become more popular, many companies started to produce wearable products,
such as Xiaomi, Apple, Garmin, and Samsung.
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Table 2
In the table above is shown that Fitbit is still number one in the top five wearable devices. In
the last quarter of 2016, Fitbit’s market share is 19.2%. However, competition is not far
behind, namely Xiaomi. Xiaomi is the biggest competitor of Fitbit and it has gained market
share, while Fitbit lost market share during 2016. Xiaomi is currently the fastest growing
company in this market, so Fitbit must undertake action in order to stay ahead of competition.
Customers
The market consists of many types of consumers, products, and needs. It must be determined
which segments offer the best opportunities. Customers and consumers can be grouped and
served in various ways based on geographic, demographic, psychographic, and behavioral
factors.
The process of dividing a market into distinct groups of buyers who have
different needs, characteristics, or behavior, and who might require separate marketing
strategies or mixes, is called market segmentation [CITATION Phi17 \p 212 \l 1043 ].
Geographic segmentation divides people based on nations, regions, countries, cities, or
climate [CITATION Phi17 \p 213 \l 1043 ].
Demographic segmentation divides the population based on age, gender, family size, income,
occupation, religion, race, or nationality [CITATION Phi17 \p 214 \l 1043 ].
Psychographic segmentation divides buyers into different segments based on lifestyle or
personality characteristics [CITATION Phi17 \p 215 \l 1043 ].
Behavioral segmentation divides buyers into segments based on their knowledge, attitudes,
user status, or loyalty status. [CITATION Phi17 \p 213 \l 1043 ]
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The typical customers of Fitbit are those who want to improve their lifestyle and health. These
customers choose Fitbit, because they want to achieve a personal goal and Fitbit is an
ultimately useful tool to assist with this. The targeted customers are not particularly based on
age, gender, religion, race, or nationality because all these groups could buy a Fitbit device.
Fitbit uses the psychographic segmentation to target their segment. They target people who
want to improve/change their lifestyle. Furthermore, Fitbit may use the behavioral
segmentation as well, because they target 1their customers also based on attitude. The
behavioral segmentation divides the buyers based on attitudes or benefits, and Fitbit does
target buyers with motivated and healthy attitudes.
Macroenvironment
What is also worth discussing besides the microenvironment, is the macroenvironment. The
macroenvironment consists of larger societal forces that affect he microenvironment –
demographic, economic, natural, technological, political, and cultural forces [CITATION
Phi17 \p 92 \l 1043 ].
Demographic
Demography is the study of human populations in terms of size, density, location, age, gender,
race, occupation, and other statistics. Changes in demography are analyzed in changing age
and family structures, geographic population shifts, educational characteristics, and
population diversity. [CITATION Phi17 \p 96 \l 1043 ]
People are getting older nowadays, so it is important for Fitbit to focus on
older people as well. The level of education has increased in the last couple of years, so
people are more aware of the importance of a healthy lifestyle.
Economic
Economic forces are the economic factors that affect consumer purchasing power and
spending patterns. Changes in major economic variables such as income, cost of living,
interest rates, savings and borrowing patterns, have large impact on the marketplace.
[CITATION Phi17 \p 103 \l 1043 ]
Due to statistics of the World Bank Group, the GDP per capita has increased
over time, which is positive for Fitbit (www.data.worldbank.org). Consumers have more
purchasing power, so it is more likely for them to purchase a Fitbit device.
Natural
Natural environment is the physical environment and the natural resources that are needed as
inputs by marketers or that are affected by marketing activities. Changes in factors such as
raw materials, increased pollution, or government intervention influence the natural
environment [CITATION Phi17 \p 104 \l 1043 ].
Fitbit can improve their devotion for the environment by making the
wearables devices recyclable. This will improve their image as a company.
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Technological
Technological forces are those that create new technologies, new products or market
opportunities. [CITATION Phi17 \p 106 \l 1043 ]
Technology is extremely important to Fitbit. Because the technology is
developing quickly, they have to keep track of all the innovations to adjust and improve their
own products and devices. This is how Fitbit will stay ahead of the competitors.
Political
The political environment involves laws, government agencies, and pressure groups that
influence and limit various organizations and individuals in a given society. [CITATION
Phi17 \p 108 \l 1043 ]
Fitbit manufacturers its products in China and it offers their products in a lot
of countries. All these countries have different laws and regulations regarding to
manufacturing, marketing, selling, etc. So, Fitbit has to answer all these laws and regulations
in the different countries where it operates, to keep the government and politicians in that
country or region satisfied.
Cultural
The cultural environment consists of institutions and other forces that affect society’s basic
values, perceptions, behaviors, and preferences. [CITATION Phi17 \p 111 \l 1043 ]
The society is becoming healthier and environmentally aware. Fitbit benefits
from this, by providing help to customers to become healthier and implement a better
lifestyle.
Competitive strategy
Competitive marketing strategies are strategies that strongly position the company against
competitors and give it the greatest possible competitive advantage[CITATION Phi17 \p
542 \l 1043 ].
Fitbit follows a mix the differentiation strategy and the focus strategy. The differentiation
strategy is defined as the strategy in which the company concentrates on creating a highly
differentiated product line and marketing programs, and it takes the position of class leader in
the industry [CITATION Phi17 \p 551 \l 1043 ]. This is applicable to Fitbit follows this
strategy, because they offer different styles of wearable devices and have several marketing
programs to show the customers that they lead the market. Fitbit uses different marketing
items (magazines, TV commercials, famous people) to promote their products among
customers.
In the focus strategy a company focuses its effort on serving a few market segments well,
rather than targeting the whole market [CITATION Phi17 \p 551 \l 1043 ]. Fitbit does not
target the whole market but follows this strategy by focuses on people who want to improve
their lifestyle and health.
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Conclusion
Strategic advice
In the introduction of this report, an overall research question was stated: ‘Which marketing
strategy should Fitbit use in order to stay ahead of the competition?’
To stay ahead of the competition, Fitbit should keep innovating and adapting to the need of
their target customers. They should also try to gain strategic advantage by positioning their
offerings strongly against competitors’ offerings in the minds of consumers. The introduction
of the Fitbit Iconic is a perfect example of this, because this new wearable device is very well
received by the buyers.
They should improve their social media, because social media is one of the most effective
marketing tools that exists, due to the importance of social media in peoples’ lives. By
improving social media, people become more aware of the existence of Fitbit which leads to a
better brand recognition.
Furthermore, on the website of Fitbit (www.fitbit.com) there is no option to change the
language of the website (only English). Because Fitbit has a lot of users outside the US, Fitbit
should improve their website by adding different language options. Through this way, more
people can use the website and thus Fitbit can reach more customers.
In conclusion, Fitbit should continue its innovating projects and alter little things to stay ahead
of the competition and to stay the main wearable device seller.
https://vimeo.com/111235164
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References
Books
Philip Kotler, G. A. (2017). Principles of Marketing. Pearson Education Limited.
Websites
https://www.fitbit.com/nl/about
February 16th, 2018
https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?end=2016&start=1979
February 17th, 2018
https://investor.fitbit.com/press/press-releases/press-release-details/2018/Fitbit-CommunityGrows-to-More-Than-25-Million-Active-Users-in-2017/default.aspx
February 17th, 2018
https://www.theguardian.com/technology/2015/jun/04/xiaomi-worlds-second-biggestwearables-maker’
February 18th, 2018
https://venturebeat.com/2018/02/23/meet-sonys-first-full-screen-smartphones-xperia-xz2-andxz2-compact/
February 18th, 2018
https://community.fitbit.com/t5/Charge-2/Step-counting-not-accurate/td-p/1853371
February 25th, 2018 15:33
https://www.fitbit.com/nl/home
February 25th, 2018 12:20
Table 1:
http://www.nerdwallet.com/blog/shopping/fitbit-comparison-best-fitbit-activity-tracker-foryou/
February 17th, 2018
Table 2:
www.idc.com
International Data Corporation, worldwide quarterly wearable device tracker
February 18th, 2018
Appendix 1:
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https://www.fitbit.com/content/assets/legal-pages/FITBIT%20AUTHORIZED
%20RETAILERS%20Q2%202016.pdf
February 18th, 2018
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Appendix 1
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Appendix 2
Accountability
We hereby certify that we are the authors of the report.
We have verified that this report includes no plagiarism.
Quotations from other work were referenced accordingly.
The distribution of the work for this report is as follows:
Student number
S3453669
Name student
Julia Oude Hendriksman
Percentage of work*
25%
S3427498
Eileen Kremer
25%
S3424995
Rosanne Jonkers
25%
S3330524
Celina Solstad Høvik
25%
100%
*If there are four students in a team and everyone contributed equally to the report, each student
gets a percentage of 25. If there is unequal contribution you can mention different percentages. The
total of the percentages must be 100.
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