5. Market-Product Focus
This section describes marketing and product objectives for the next quarter for Fitbit, Inc. The market positioning, target market, and differences from market opponents.
Marketing and Product Objectives
During the 2nd quarter of 2015, Fitbit, Inc. indicated growth in the wearable fit tracking industry by issuing new products; Charge 2 and Flex 2. As significant factor, the company uses potential growth in international spectrum of the brand. In general opinion, Fitbit is correlated with health and fitness. These two trends are the main points of interest within marketing department. So that, as the target market Fitbit bases their attention on people who care about health or think about changing bad habits. An increased revenue in the next quarter is one of many goals set for following quarters of 2016. The main objective of the health and fitness industry could be separated by:
• Local markets: 4.8 million health and fitness devices were sold globally. Newer products, Fitbit ChargeTM, Fitbit Charge HRTM and Fitbit SurgeTM, have brought 79% of revenue.
• International markets: Fitbit products are carried in 54,000 retail stores and in 64 countries around the globe.1 In 2016, 27% of revenue based on ship-to destinations, was from sales outside of the United States.3
• New products: The latest Charge 2 and Flex 2 indicate that the company is growing up, giving form and function equally in importance.2 New products are accounted for 54% of sales, while operating expenses more than doubled to $235.3 million as Fitbit continued to invest in research and development and marketing.4
• Health and Fitness industry: Fitbit cooperates with many partners to reach all of the customers' needs and tries to satisfy all of their goals. Together they were able to get to the 50% of the US population.6
Due to the competition, the demand for Fitbit products dropped significantly down. This issue is mostly related to the lower need for fitness truckers and increase of cheaper and lower in quality substitutes on the market. However, Fitbit is still number one in wearable fit tracker industry. By the current statistics prepared and released by IDC, the Fitbit still owns 25 percentage points on the market.2 It has to be mentioned that fit trackers are separated from Smart Watches. If the statistics would compare overall smart wearable gadget market, Fitbit would lose the position. By the primary objective of the Fitbit, putting most of the attention on the health industry, they want to increase its equity and keep on developing current products; the smartwatch subgroup of the company is created just to testify if it is profitable to invest any afford and funds in Fitbit branded watches. So far, by another statistic made by IDC, number one in Smart Watch industry is Apple which own 45% of the current market. The IDC came with new report describing current status of demand. It brought issues for current producers, but positive signs for potential developers like Fitbit. By the research, Smart Watch industry decreased by almost 53.1 percentage points7. It is great opportunity for Fitbit to start scheduling if it is really affordable to implement any additional funds in the Smart Watch market. So far, they supposed to keep on current position in fitness trackers market.
Primarily, the target market of the company are the people who consider to change or want to extend their capabilities of improving health conditions. Fitbit officially do not specify the target market, because objectives are distinguished among the potential users9. Since the 2007 the company sold sufficient number of products and it could be measured who really uses the product. By the observation, surprisingly, the main users are not the athletes or even recreational runners. Most of them are the people who buy stylish clothing and Fitbit just fits the style. In addition, Fitbit products are considered as great, whatever occasion, present option. So that, many people who did not consider buying the product, they will potentially wear it. It creates self-named wave situation, where unaware customer uses the gossip method of spreading the product. Because the Fitbit brand is a well-known brand, the overall result of such trend is very positive for the company itself.
Differences from market opponents
Fitbit created around the brand the aura of success and quality. Most of the people who consider or mention in their talking the topic of fitness trackers, as the first thought it appears Nike and Fitbit. Those two brands are well known all around the world of being specialized in fitness, sport, athleticism, and even recreational purposes. However, Fitbit started the coexistence on the market in 2007. Comparably to Nike which was founded in 19648, Fitbit can proudly emphasize about the huge success which appeared in such short period. The difference which distinguish them from the competition is technology and material used in production. In addition, they separated their products not only between purposes, but also by sex, gender, and even age. Other companies who issued fit trackers do not offer as much varieties of bands, colors, and styles which could satisfy anybody. Also, the main trend is to offer unisex products. But not the Fitbit. The online store offerings could be compared to any other company with option of custom modification of the product.
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