Executive Summary Will you like walking the length of the Golden Gate Bridge, or climbing the Eiffel Tower? How cool is it that by taking a number of steps a day, you can contribute to vaccines for children in India, provide clean water in Mexico or protect the rainforest in Africa?
Is there a platform where all these, including exciting games is a reality? Yes, there is. Doctors have been telling us to take at least 10,000 steps a day to stay in shape and prevent health risks, but who has the time? Apparently, it’s not a question of having time; it’s a question of having the right motivation.
The geniuses over at Striiv, Inc. , found the answer in their new technology; Striiv. With a start up of $250000 and venture capital funding of $6 million, Striiv, a fun, fancy new pedometer is to be launched during the holiday season.
The marketing plan has been detailed in this presentation. Perhaps, Striiv will be the answer to that “get healthy” New Year’s resolution.
COMPANY AND PRODUCT DESCRIPTION Striiv Incorporated was co-founded in 2010 by David Wang and Marc Ross, the CEO and VP of Engineering respectively. It has headquarters in Redwood City, California and is focused on integrating gaming mechanisms across everyday life activities and experiences, especially those that need an infusion of fun to motivate and inspire (like exercise).
Striiv is comprised of a team of world-class game designers, artists, cutting edge technologists, and management experts with diverse and lengthy industry experience. Later this year, the company plans to launch its first product called Striiv; an innovative pedometer type product. With an assumption of initial start up of $250000 and a planned venture funding of $6 million, Striiv aims to start ‘a movement around movement’. 1 1 Striiv is a sleek fitness motivator that counts every step and the number of stairs you take.
It is designed to fit smoothly between your keychain, belt clip, pocket or handbag. It has the most advanced tri-accelerometer (technology that counts steps/activity) available. It is always on and has up to a week battery life when fully charged. Its high resolution colored screen displays games, tracks progress, indicates personal challenges and opportunities to donate to charity while walking, running or climbing stairs. ‘My land’ is a pre-loaded game on the striiv that lets you create your own enchanted island filled with exotic wildlife and plants.
The more you move, the more your enchanted island flourishes. The striiv displays your progress and gives you fun challenges to beat your personal best. For example, a display may show “ten steps from reaching the top of Eifel Tower”. Walkathon is a service on the device whereby every step counts towards a donation to charity from corporate sponsors at no cost to you. Striiv is presently partnering with Global Giving and will provide donations based on aggregate amount of users’ steps. Initially, striiv will support donations of clean water in South America and polio vaccine to children in India.
New charities will be added in time. Striiv consists of a personal fitness device with colored touch screen, USB port/electrical adapter, USB cable, keychain adapter, belt clip, 2 screen protectors, manual and a one-year limited manufacturer’s warranty: all these towards creating ‘a movement around movement’. SITUATIONAL ANALYSIS Looking at the market structure, which is consists of many competitors, we can broadly classify our competitors into four different categories using the demand based method of classification.
First is the product form competition, these are our closest competitors. They include accelerator type pedometers that ensure accuracy of step counts, no matter where you choose to wear them. Second is the product class competition, these are string levered (SLA) type pedometers. They may not be completely accurate in their counts, depending on where you wear them. 2 2 Third is the generic competition, they include other devices with pedometer applications.
These devices such as smart phones and wrist watches can in addition to their primary functions, function as pedometers Lastly we have the budget competition which includes products that compete for the same dollar amount dedicated to fitness and lifestyle activities. E. g. the gym centers, yoga classes etc. The product form competitors who are our main focus include Omron, Fitbit, and many more. In our analysis we can see that our competitors’ strategies are based on stressing the functionality of their product in terms of how effective they are in counting steps.
Also, most of them have been around a while and hence there is better awareness of their brand names, and they already have varying levels of customer base as opposed to we who are just looking to enter the market. On the other hand, we have the technological advantage to swiftly propel ourselves to a leading brand, as we have developed our own hardware platform. Presently Striiv has the most advanced Tri-accelerometer available. STRENGHTS| WEAKNESSES|
* TECHNOLOGICAL ADVANTAGE * HIGH PRODUCT QUATLITY * EXPERIENCE AND KNOLEDGE OF MANAGEMENT TEAM * CHARITY INCENTIVE * PRODUCT IS INNOVATIVE (FUN AND GAMES)| * NEW FIRM * SINGLE PRODUCT LINE| OPPOURTUNITIES| TREATHS| * INCREASED LEVEL OF HEALTH CONCIOUSNESS * CUSTOMERS ARE DRAWN TO CHARITY INCLINED ORGANIZATIONS * LARGE MAKET POTENTIAL| * STIFF COMPETITION * NO INDUSTRY ENTRY BARRIER| 3 3 COST STRUCTURE Our cost structure will consist mostly of variable costs i. e. the unit cost of each pedometer produced, and all other added costs of importation, taxes, fees, duties, packaging etc.
Fixed costs will include software installation and maintenance, operating system encryption for the product and also technology developments. COMMUNICATION AND CHANNEL Because of the large size of our target, which is the majority of the populace, we look to partner with distribution channels that can easily reach such large number. We will be using use multiple channels; internet (including opinion leaders, blogs), employment of salespeople, large retailers because we want maximum early penetration and we can afford it. We will use the internet also because it is the trend in the pedometer industry.
We will also look to sell through a few large scale retail stores, and communication will be through these channels too. PEST ANALYSIS Political considerations include the health care reform for wellness that informs people of the benefits of being preventive rather that curative, this can only be positive for sales. Also, production in China will give room for import duties and restrictions such as tariffs, trade restrictions quotas etc. Economically, fluctuations in exchange rate will affect profitability whether positively or negatively. China’s economic rise might production there not so favorable in the future.
Reduce disposable income may also cause customers to view the product as luxury. Socially, healthcare consciousness in the country continues to increase. The majority of the population is becoming more tech-savvy. According to the National Institute of health, more than 60% of Americans are either overweight or obese. Technologically, the company’s proprietary TruMotion technology gives it competitive advantage. Also, we boast of a team of world class game cutting-edge technologist focused on continually improving product technology, thereby keeping in touch with the newest technology.
4 4 BUYER ANALYSIS Intended customers are the mainstream audience -particularly women- who are health conscious but cannot make time out of their busy schedule to work out. Our target customers are therefore described as busy, health conscious, fun loving, and charity inclined. Also we look to target gift shoppers as Striiv will make an amazing fun gift for loved ones. The market size is huge as everyone wants to either become or remain fit and healthy. Recent statistics show that about 60% of Americans are either overweight or obese.
Looking at the attributes of the product, which include not just accurately count steps but also telling the difference between walking, running or climbing the stairs, the fact that it is very easy to read, its activity-based built-in game, the advanced technology (the high resolution full color screen, touch screen display, TruMotion technology etc. ), the ability to share your achievements with friends, getting reminder messages on what you have been able to achieve in a day, and also the fact that it is competitively priced, customers should be willing to pay i.
e. getting all the added value at a relatively comparable price is a bargain for the customers. The market is segmented into the need segment, which are people that need a pedometer simply to keep track of their steps and calories burnt, and the fun market which are people who want to have fun as they walk towards fitness, this segment also includes those that want to get it as gifts for others. STRATEGY Extensive marketing research done showed strong need and improvement in the fitness and lifestyle product market. Factors such as aging population,
increasing rate of morbidity associated with obesity and sedentary lifestyle, adoption of preventive health and wellness are indicators of a fast growing market with ample opportunities and room for innovation and market entry. Several products are already in existence in this product market however, new innovations and product are been introduce rapidly as this is still an immature market. 5 5 Our target market is the health conscious individual within a wide demography pattern. We intend to target people who desires improve their daily level of physical activities make time for the conventional workout sessions.
We also target individuals who desire to workout but are not motivated enough to do so. Striiv also target game lovers by enabling them transform their passion for game into more physical activities. Another major target market of Striiv is the people with philanthropist mind that love to good things for a good cause. The outstanding characteristics expected from these individuals will be highly busy schedules; lack of motivation for adopting a healthy lifestyle despite having a desire for it.
Greater percentage of our target market include women; ranging from stay home mums to working class mothers, and the aging population who may not be able to work out vigorously with the facilities provided by the gyms. Striiv seeks to help people become more active all the time using self-evaluation and measurement as its key element to willingness and motivation to be in better health. We aim to blends gaming which are completely powered by physical activities with fitness and more. Striiv acts partly as a pedometer to track your activity and also allows you to play games, and use your activity to donate to charities.
Identification and comparative analysis and rating of Striiv to other product that is competitors’ shows: | STRIIV| FITBIT| ACCELEROMETERS| APPLICATIONS| BATTERY LIFE| +++++| +++| ++| ++| TECHNOLOGY| +++++| ++++| +++| +++| DESIGN| +++++| +++++| ++| ++++| DURABILITY| +++++| ++| +++| ++++ | CHARITY| +++++| -| -| -| WEB PLATFORM| ++++| +++++| -| +++++| GAMING| +++++| -| -| -| COST| ++++| ++++| ++++| +++| MULTIFUNCTIONALITY| +++| +++| ++| +++++| 6 6
In summary, Striiv intend to revolutionize the fitness world by combining gaming mechanics with real world activities is also transform to act of charity. With Striiv, you do well to yourself and also to the world! Striiv motivates you to transform your life with games, donations, and personal challenges that are powered by your activity. With Striiv, fitness finally fits around your schedule. The more you walk, the more you give. Create your own enchanted island filled with exotic wildlife and plants. With Striiv, you get fit, give back and have fun! MARKETING PROGRAM PRODUCT
* Striiv will accurately measure the physical activities such as walking, climbing stairs, running and even hiking * Striiv will be produced will be design in USA and assembled in China to reduce cost of production * Striiv has a proprietary ‘TruMotion’ technology that works in the background of the device and can sense all kinds of physical activity * It fits on your keychain; it also works in the hand, belt, and even purse counting every steps you take all day * Striiv will be a sleek fitness device, half the size of a credit card, variety of about five colors will be made available- white, blue and pink, black and silver PLACE
* Striiv will be marketed and distributed through the website using the one stage distribution channel with multiple internet retailer such as Amazon, Home Shopping Network, EBay * Also, sales in stores such as BestBuy, RadioShack and Fitness Gear will be used for sale * Product will be package primarily towards the consumer. For tertiary packaging and labeling, Universal Product Code and Bar codes will be used * The internet method of processing orders will be used to allow prompt exchange of information, instant confirmation and visible record of transaction * A 30 days return policy with 60 days warranty will be offered PRICE * The proposed price of Striiv will be $95 as against the estimated perceived value.
This price is still in the same range with the price of established competitors * 7 7 Competitors are not predicted to be price sensitive hence a good prediction can be made concerning their willingness to pay * The skimming pricing method was adopted aiming the early adopters first, and the price will later be reduce in the future as improved versions are introduced PROMOTION * An undifferentiated or mass marketing strategy will be employed in which we will go after the whole market with one offer. * The idea is to broadcast message that will reach the largest number of people possible using the internet as our medium to reach a broad audience.
. Use of multiple internet programs and advert will achieve this * Employment of sales people to sell to companies in bulk for gift items for both staffs and customers * Advertisement will attempt to appeal to the fun and compassionate underlying psychological aspect of the purchase decision * Interview with day time shows will be schedule to broadcast the program more * Pulsing pattern of advertisement will be adopted with seasonality of sales in mind * Blogs, Facebook and twitters will be utilize for feedback and users’ experience Financials Break-even point Based on the consideration above, we decided to price Striiv at 95 dollars. The variable costs per Striiv are 32 dollars and the fixed costs are 2,580,000 (refer to the information as follow). The break-even point is the level of sales at which revenues equals expenses and net income is zero. Thus, we can calculate Break-even point: Per Unit Selling price
Variable costs Contribution margin $ 95 32 $ 63 Per Unit Selling price Variable costs Contribution margin $ 95 32 $ 63 $2,580 ,000 Fixed costs ? $63 =40,953 (break even) $2,580 ,000 Fixed costs ? $63 =40,953 (break even) 8 8 From the calculation above, we can learn that Striiv will achieve break-even point when it’s sold for 40,953 units. Financial information Because Striiv is a global product, we estimate it’ll be sold for 100,000 units and occupy market share as 5% in three year time period. The contribution margin of striiv is as follows. Striiv Contribution Margin Income Statement For Year Ended December 31, 2013 (in thousand)| Sales| $ 9,500(1)| |
Less Variable Costs:| | | Cost of Goods Sold| $ 3,200(2)| | Total Variable Costs| $ 3,200| | Contribution Margin| $ 6,300| 66%| Less: Fixed Costs:| | | Advertising| $ 850| | Depreciation| | | Computer equipment| $20| | Office equipment and fixtures| $30| | Operations: salaried staff| $ 876(3)| | Administration| $ 300| | Rent| $ 360| | Utilities| $ 80| | R&D| $150| | Total Fixed Costs| $2,666| | Net Operating Income| $3,634| 38%| 9 9 Note: (1) 95*100,000=9,500,000 (2) 32*100,000=3,200,000 (3) Assume we hire 20 employees and pay them $15 per hour. Each one works eight hours a day and 365 days a year. 20*15*8*365=876,000 EVALUATON & CONTROL
Resources are scarce and costly, so it is important to control Striiv’s sales and marketing plans by setting standards. Actual progress should be compared against the standards. If sales plan vary from projections, an investigation to establish the cause of the problem should include: * Market share analysis * Sales analysis * Quality controls * Ratio analysis * Marketing research * Marketing information systems * Feedback from customer satisfaction surveys * Cash flow statements * Customer relationship management (CRM) systems * Location of buyers and potential buyers * Activities of competitors to aspects of your plan * Distributor support * Performance of promotional activities * Market reaction/ acceptance to pricing policies
If Striiv’s sales vary from the projection, a sharp drop in the price of the product is not an option because of the psychological aspects of pricing. Customers sometimes use the price as a signal of the product quality. Options to be considered may include: * 10 10 Bundle Pricing * Bonus Packs e. g. buy 3 get 1 half the price * Tie-ins to charity or sporting events * Price discrimination in favor of large purchases e. g. company wellness programs * Reducing overhead costs including research and development costs * Improving the product features and quality on response to feedback and the competitor’s products REFERENCES I. http://marketingteacher. com/lesson-store/lesson-control. html II.
http://www. livestrong. com/article/392515-top-rated-pedometers/ III. http://www. fitness. gov/execsum/execsum. htm IV. http://answers. google. com/answers/threadview/id/138544. html V. http://www. researchandmarkets. com/reports/239740/gym_health_and_fitness_clubs _in_the_us VI. http://www. pacificedc. org/Library%20Docs/Fitness%20Center%20Report. pdf VII. http://oxygen. mintel. com/sinatra/oxygen/display/id=543330 VIII. http://www. getamericafit. org/statistics-obesity-in-america. html IX. http://www. cdc. gov/diabetes/pubs/factsheets/county_inactivity_estimates. htm X. http://www. cdc. gov/obesity/data/trends. html XI. http://www. bizjournals.
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Cite this Marketing Product Final Project
Marketing Product Final Project. (2016, Sep 03). Retrieved from https://graduateway.com/marketing-product-final-project/