The company has developed a new wearable product, named Fitbit Safe, which leverages wireless technology and sensors to cater for the health, fitness, and in particular security needs of its clients. Its mission statement is to attain superior health, fitness, and safety for its target market, which is young single ladies aged between 16 and 39 years. These are individuals who lead busy lifestyles who participate in running, outdoor sports, or walking home mostly in the evenings after work. The company has differentiated the new product by incorporating features such as an alert button, messages, and telephone calls. The company hopes to assist its customers to achieve their fitness goals by effectively tracking their activities, exercise, weight, rest and importantly safeguard them from sexual assaults or robbery. This report will focus on a comprehensive evaluation of the current proposition with the aim of identifying strategic issues that can have adverse effects on the launch of the product in the market and propose amendments to improve it with proper justifications.
Fitbit has identified business-to-business (B2B) sales as a major avenue to ensure the success of the new product. According to Shi, Sridhar, Grewal, and Lilien, these clients do not only care about the quality of a product and the pricing but also a great sales experience. However, the company must ensure that its personnel gets the basics right. For instance, it is inappropriate to bombard business heads with marketing messages; thus, the company must make sure that there is only sufficient contact. Marvel, it is important to focus on the benefits of a product offering and how they will make a difference for the end-users. Although personal selling was identified as among the sales techniques for the launch of the Fitbit Safe product, it would be more suitable to rely on key account management when dealing with B2B clients.
Selling to B2B customers implies that the companys personnel will deal with company executives. These business leaders need to understand what value that Fitbit Safe will introduce. According to Brennan, the ability to create a successful business relationship and keep competing firms out requires direct collaboration with the decision makers. Personal selling takes a narrow focus in determining business opportunities, has a short-term perspective, and involves small teams whose sole intention is to win the opportunities. Consequently, clients often become defensive when dealing with sellers. Tzempelikos and Gounaris, state that KAM takes a broader focus by emphasizing more on value creation, improvement of customer satisfaction, and alignment of customer needs to marketing efforts. Also, it takes a long term perspective and often constitutes account managers or teams that focus on the implementation of a particular strategy. Since KAM incorporates steps such as the discovery of needs, a client-oriented approach, and the alignment of customer needs and objectives, business leaders seem to be more open and trusting.
A key account manager is expected to be knowledgeable about anything that a corporate client needs to know about the new product and the company. According to Hollensen, the KAM concept arose from the need by clients to have an inside person that they can rely on. Woodburn and McDonald, state that the holder of such a role is important especially when one is well-versed in the dynamics of a specific industry. Consequently, one should be a strategic planner to make sure that the objectives of the business relationship are met. Besides, one should be a customer advocate by protecting the interests of customers internally. Since ones task involves building long-term relationships based on loyalty and interconnectedness, it is important to be a capable relationship architect.
The adoption of a pricing strategy entails striking a balance between the relationship between perceived value, price, quantity, and volume. According to Smith, customers often pay higher prices for products or services that that perceive to be of high value. However, customer perceptions often vary; thus, it is critical to take a comprehensive evaluation of the various factors and attain the right balance based on customer acceptance and the anticipated revenue and profitability levels. Ferrell and Hartline, state that adopting a pricing strategy should take a customer-centric approach and a firm should not try to replicate what others in an industry have implemented. It is important to establish how a companys cost structure, profitability goals, and consumption habits at various price points will influence its strategy.
The company has a unique product that not only serves the health and fitness objectives of its clients, but also caters to the security needs when they are undertaking physical activity. Jones, George, Barrett, and Honig, state that new technological products tend to be expensive as companies can command higher prices for them because its competitors cannot match certain features. Although premium pricing is not practical for a company with direct competition, Fitbit is operating in an industry with a few comparable competitors such as Samsung and Apple. The choice to adopt medium pricing was taken to portray that it is offering high-quality products at a reasonable price. However, Fitbit Safe is operating in a luxury market, which means that the pricing strategy can have an adverse impact on customer perceptions about the brand despite the products superior features.
The company will experience various benefits by adopting premium pricing rather than medium pricing. According to Kapferer and Bastien, setting a higher price for a product than for comparable ones is often useful in maximizing the profit especially in markets that clients have the capacity to pay more and there are no substitutes. The technology firm will give its new product an aspirational image by charging a premium price and such efforts are useful in capturing the high-end market for those seeking high-quality wearable devices to serve their fitness and health needs.
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The Extended Marketing Mix
The marketing mix is a set of components utilized by a business to empower to meet customer needs and expectations. According to Solomon, Hughes, Chitty, Marshall, and Stuart, these elements are inter-related; thus, a business has to make sure that they work together to achieve its marketing objectives. The conventional marketing mix incorporated four elements of product, promotion, place, and price. According to Hanlon, over the years an additional three components have been adopted to make the extended marketing mix with 7 Ps that incorporates the physical evidence, process, and people. Therefore, Fitbit has to ensure that these elements work closely to attain effective marketing through the incorporation of human resource management and operational aspects.
The product component refers to a good, service, idea, person, or place that is offered for sale. According to Khan, it incorporates the packaging and design of a good, physical attributes, and any associated services. A product consists of various elements, which are critical to its success in a market. Baker, states that the actual product is the physical good or real service that is supplied, the core product is the benefits to consumers, and the augmented product refers to the supportive features such as delivery and after-sales service. The company has aptly developed a superior product in Fitbit Safe. Besides, it has chosen to communicate its benefits in appropriate manner in the marketing especially in highlighting the security feature that is not present in other competing products. The shift of attention from working with sales teams to key account management implies that Fitbit should negotiate with each vendor to determine the offers, free services, and warranties that they will offer end-consumers. However, the company should maintain common freebies such as free 3-month trials for the security feature and the one-year waiver for membership fees for new registrations.
The price component of the marketing mix refers to the value that customers give up or exchange to obtain a specific product. Baker and Saren, state that firms use price to increase the interest of consumers in their product. Most users rely on price to judge the quality of a product even where a direct relationship does not exist. Conversely, price is a critical component for a business as it generates profits and revenue unlike other elements of the marketing mix, which are cost generators. According to Barrett and Weinstein, some of the most critical factors to consider when setting a price level include the variable and fixed costs, competitors prices, organizational objectives, positioning, and the ability and willingness to pay of the target group. The company will adopt premium pricing to indicate the exclusivity of its Fitbit Safe product especially due to its security feature. Most consumers will perceive it as a high quality product; thus, the company should adopt a price that portrays the perception.
The marketing mix component of promotion incorporates activities that firms undertake to inform and encourage existing and potential customers to buy their products. Armstrong, Adam, Denize, and Kotler, state that the adoption channels to initiate a conversation with target consumers should begin with efforts to understand the dynamics of the intended audience and determining the promotion activities that are likely to meet desired targets. The chosen promotion model should incorporate information about other components of the marketing mix to ensure that consumers fully understand its features, benefits, and the expected user experience. According to Ferrell and Hartline, a marketer should filter information to include that which is relevant to the target market. The company will rely on the public relations (PR) events and sponsorships to create awareness, build interest, and provide information about Fitbit Safe. Besides, it will encourage consumers to share their experiences to stress the products differentiation and stimulate demand.
The element of the marketing mix refers to the availability of a product to consumers at the right time and location. According to Lee, Yim, Jones, and Kim, place is associated with the distribution channel that incorporates parties that collaborate to get a product to the consumers. An essential factor about the element is the accessibility of products to customers at any time. Andrews and Shimp, a business should begin the process of selecting an effective distribution channel by evaluating and understanding customer needs, discussing and identifying channel objectives, and outlining distribution processes and tasks. The company has established various retailers as it distribution partners, which are mainly sports and fashion stores where its target clients visit frequently. The distributors will not carry products that are in direct competition with the Fitbit Safe and will make money from the sale to consumers. The approach will ensure that customers can easily obtain the highly priced product in the selected stores.
Another critical element of the marketing mix is people who comprise all individuals involved directly or indirectly with a product or service offering. According to Mohammadi, Saghaian, and Alizadeh, although not all these persons interact directly with customers, they undertake different roles in marketing, production, and distribution of product or service offerings. Fitbits success is dependent on all its people from the top executives to front-line staff; thus, having the right people is critical as they determine the kind of product that it will offer its clients. The company will focus more on KAM, it should seek to recruit individuals who have the right set of skills to build and nurture valuable relationships with its major business partners. The company has a robust training program that focuses on product knowledge and the features to benefits model, which will enhance their ability to engage customers and increase the companys sales.
An additional critical element of the extended marketing mix is the process, which is concerned with customer service and the capacity of a firm to make an offering available, address any issues that arise, and anticipate problems. Rowley, state that processes incorporate both direct and indirect activities, which add value to consumers and support the direct activities respectively. Fitbit has adopted robust procedures and policies concerning maintenance of cost effectiveness, sales management, distribution, human resource, and information technology (IT) systems to ensure that it serves its customers in the most efficient and effective manner. Shank and Lyberger, it is important to continuously tweak and introduce improvements on all the processes to make it easy for the organization to enhance its profitability levels and lower its costs.
The last component of the extended marketing mix is physical evidence, which entails how a firm and its products are perceived in its market. According to Carter and Curry, it encompasses the environment in which a firm interacts with its customers. Since customer form opinions quickly, firms should make sure that it matches branding messages. Fitbits corporate image and the products brand identity should be supported by recognizable artefacts, signs, and symbols. Besides, its packaging, paperwork, graphics on the internet, furnishings, brochures, business cards, and signage should be consistent with the customer needs that it wishes to fulfill. Fitbit has made tremendous efforts to ensure that consumers can associate its new product with health, fitness, and security. Besides, the brand appeals to young, stylish, and active women. The choice of sports and fashion retail companies as distributors is also consistent with the branding message.
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The launch of a new product by a business requires it to make decisions on how to present the product to prospective customers. According to Rosenbaum, Otalora, and Ramirez, companies must adopt unique customer touchpoints to be effective in the identification of the products attributes and entice possible clients to visit areas in which they can purchase it. Since the business has spent huge resources in developing the Fitbit Safe product and its associated logos, colors, and design, it must ensure that these efforts can effectively establish the brand in customers minds. Therefore, the companys marketing team must position the touchpoints in an appropriate way at the earliest opportunity. Fitbit should adopt various touchpoints before, during, and after the purchase of its new product.
The effective use of touchpoints requires a business to identify its target market, channel resources to the touchpoints that will raise the most profit, develop realistic objectives for the execution, and constantly evaluate their performance to determine if changes are necessary. Magids, Zorfas, and Leemon, observe that the fast changes that are inherent in the marketplace imply that they face the enormous challenge of selecting which ones to invest in and the media channels to utilize. It is more appropriate to adopt a direct approach in the adoption of touch points, which improve the clarity that will allow a firm to examine its performance on a regular basis.
The organization has already identified advertising as a critical way to obtain the desired exposure especially due to the tendency by customer to switch from one product to another. According to Wind and Hays, companies should utilize brief and engaging advertisements to effectively capture the target clients attention especially during the pre-purchase period and subsequently influence their decision-making. The approach will assist the company to ensure that consumers can associate with the companys brand and develop the belief that the product serves their interests. It is important for the company to monitor the advertising channels that it will utilize to establish whether the information that may appeal to the market is readily available. Besides, metrics such as overall revenue, profitability, margin, and revenue per customer to determine whether advertising results in a superior engaging experience.
Technological advancements have led to the increased use of the internet and by extension social media as communication channels. Killian and McManus, state that social media is a valuable communication platform between a firm and its customers. Its effectiveness as a customer touchpoint is based on its wide availability in a cost-effective manner. Bowen and Ozuem, note that businesses should strive to strike a balance in the management of a brand through social media to ensure that customers create profound associations with brands negativity. The organization has identified Facebook, Instagram, and Weibo as its main digital touchpoints due to the high level of interaction that they support through the ability to respond directly to posts. Fitbit should incorporate Twitter to increase its reach for promotional and informational material. In this case, various campaign metrics such as clicks, comments, conversion, and shares will be valuable in determining the effectiveness of social media.
Websites have become an effective way of communicating to potential customers by telling what they want to know as well as engaging current ones. According to Straker, Wrigley, and Rosemann, businesses should strive to have useful and fresh websites to encourage potential customers to visit and make subsequent references. A robust website allows a company to advertise online. Killian and McManus, state that the use of recurring messages and advertisements will boost the interest of potential customers. It is important for Fitbit to ensure that its website is mobile-friendly as mobile transactions are increasingly rapidly as more people access the internet through smartphones and other hand-held devices. Besides, it should adopt a responsive web design, utilize short and sweet menus, and allow guests to check out without registrations. Such a website will be valuable in building brand loyalty, promote repeat business, and support word-of-mouth marketing by satisfied clients. The company can utilize measures such as web traffic and analytics, lead flow, and lead scoring to establish the usefulness of its website.
Point of Sale
A marketing touchpoint allows a company to communicate branding messages, boost consumer knowledge, and reinforce the relationship between a brand and customers. According to Stein and Ramaseshan, businesses should endeavor to create touchpoints that create and nurture relationships with specific brands in line with their marketing objectives. They often achieve effective communication with consumers through persuasion, influencing personality, and developing a positive feeling towards their brands. Fitbit has engaged various stores to sell its product, which should have in-store communications to introduce the new product and influence purchases. Although the company will only have direct control of advertising of the brand, the adoption of effective point-of-sale touchpoints will help it to collect feedback, track customer satisfaction, and gather insights that will assist the technology firm to meet customer needs in a better way. Fit bit will use various measures such as customer feedback, customer satisfaction, and increased margins to determine the usefulness of the different point-of-sales.