Strategic Marketing Plan For Fitness Smartwatch – Apple Watch Series 3

Situation Analysis

The report aims at providing an insight into the marketing strategy for a fitness smart watch incorporated with advanced and computer technology for health, fitness, communication and exercise. The product chosen here is Apple Watch Series 3 that represented the third generation of watch released by Apple in the year April 2017(apple.com 2018). The report discusses about the situation analysis, opportunities and threats, marketing objectives, marketing strategies, marketing mix action program, budget and profitability analysis and monitoring and control.

The fitness smart watch series 3 from Apple has been the real performer with sales figure close to 3.5 million in the second quarter of 2018, an increase of 30 percent of the sales figures since 2017 (Pholan 2018). It also left behind Garmin and Fitbit thereby establishing it as the lead in the market. However, the market share of the Apple smart watch reportedly declined during the first quarter due to the increase in sales of the competitor brand Garmin and Fitbit. In fact, Apple faces growing threat from the competitors that have begun to surpass the quarterly mark of the million. Vendors also try to differentiate the products with the advanced heart rate metrics, mapping and smart coaching. Besides, the consumers now have wider range of choice for fitness smart watches than they had a year ago. The smart fitness watch from Apple is about to face foreseen competition from Google and Samsung as both firms plans to launch smart watches in near future.

The global smart watch industry is expected for garnering close to $32.9 billion by the year 2020 thereby registering a compound annual growth rate (CAGR) of close to 67.6% during forecast period of 2014 and 2020.  In fact, the market for the smart watches witnessed double-digit rate on a global scale (statista.com 2018).

Fitness smart watches from Fitbit have been one of the strongest competitors of Apple smart watches (Pressman 2018). Although, Fitbit sold close to 2.7 million devices during the first quarter but Apple remained far ahead in the sale of smart fitness watches during the second quarter. The fitness smart watch tracker from Apple also stream music to the Bluetooth headphones, shows notifications of text and call and provides calendar reminders. It requires Bluetooth connection to the nearby phone and has an android operating system. It is powerful as Apple watch comprising of broader array of the apps and built in 4G LTE.

The fitness smart watch series 3 from Apple still have a new market and needs to make the product compelling so that it have an easier ride (Rear 2018). The higher income consumers mostly own this fitness smart watch. Although people in the 20s and the teens express interest in owning the smart watch, they fail to have ownership due to their higher price.   

The fitness smart watch from Apple to be marketed in Australia stirs up security and privacy issues. This is because of the unprecedented sharing of personal data, ideas, notes, events, health records and the purchase habits (Boran 2017). The real management of data raises the legitimate concerns especially the encryption during the transmission and security of storage options along with the obvious problems if the gadget is stolen or lost.

Opportunities and Threats

The fitness smart watch from Apple to be marketed in Australia has key opportunities lying in the improved day-to-day tracking activities with the focus targeted towards movement, exercise and stand targets (Danova 2015). The watch allows an individual in easy determination of the progress at a glance. The fitness smart watch from Apple also has ring-based progress that acts as an easy primer in making an individual conscious about the activity thereby motivating them in reaching closer to the rings. The smart watch also allows the individuals in receiving prompts across the day.

The strength of the fitness smart watch from Apple lies in its flexible retina display available with a force touch that makes use of tiny electrodes for distinguishing between light and deep press. The watch also have real time notification of the incoming messages, mail and calls along with Wi-fi,  GPS, Siri, accelerometer and heart rate sensor (Kovaoch 2017). It also ensures the prompt availability of various apps such as Uber, Twitter, Apple Pay, Facebook , Instagram and Maps.

The weakness of the fitness smart watch from Apple to be marketed in Australia lies in the slower importing of data. It also has a low storage of merely 75 MB for the photos. The weakness of the smart watch also lies in its battery backup that hardly lasts a day after an extensive usage. Besides the watch also does not have its own GPS technology and relies heavily on the iPhone for carrying out function like making a call or sending message (Orellano and Savvides 2018).

The key issues addressed in the plan include:

Selection of Market Segment: To position the fitness smart watch in the Australian market, selection of an appropriate segment is necessary in order to focus on the marketing efforts.

Specificity: This is necessary as it allows the marketing team in focusing on wants, needs, desires of the specific group, and the required steps for attracting the buyers.

Measurability:  This is a key aspect of the marketing plan as it aims in making the elements as quantifiable as possible thereby allowing accountability and progress tracking.

Achievability: This aspect is important as environmental factors influence the effectiveness of the marketing efforts. In fact, the achievability of the marketing plan is influenced by the strength of the competitor brand as well as their business.

This includes:

• Increase in Sales
• Improve the  awareness of Product
• Establishment of  Product Within Industry:
• Brand Management

Apple will try to achieve its objectives in the new market by adopting the following strategies:

• By defining the target market and putting efforts into it
• Through identification of the needs or benefits that the product satisfies
• By defining the marketing methods
• By Setting the time frame for the evolution of the marketing efforts
• By adopting a marketing strategy for boosting sales

The fitness smart watch from Apple will primarily target luxury-oriented customers who have an affinity for fancy jewelry, high fashion and expensive cars. The value proposition of the Apple fitness smart watch lies in being a wearable gadget with cellular connectivity and focus on the health and the fitness aspect.

The positioning strategy of the fitness smart watch from Apple lies in owning the hardware, operating system (OS), platform for software development and connected service(Love 2016). This implies that the company can create specific hardware in taking full advantage of the software thereby creating an environment of the services and the apps to flourish. As far as the branding strategy of the company is concerned, Apple uses the weight of its name to the products to be marketed. The other marketing mix strategy that the fitness smart watch from Apple can adopt besides product, price, place and promotion includes people, process and the physical evidence. Getting the appropriate people is necessary since they remain part of the business as products or services. Process refers to the service that the consumers pay for. Apple should consider certain physical elements and incorporate them while marketing. The fitness watch from Apple can create competitive advantage through quality, innovation and customer experience.

Product: The fitness smart watch from Apple is comprised of long-term cellular connectivity, dual core Apple S3, OS 4 software supporting a workout app, heart rate app and both ways data synchronization that helps in the integration of the varied cardio-fitness equipments. The GPS connected altimeter helps in keeping a track of the number of stairs climbed and the elevation data during workouts. Besides, Apple provides complete warranty along with optional three-year warranty.

Price: Apple Watch Series 3 will be available at AUS$399 with an aluminum casing and GPS connectivity. A larger case with the similar configuration is priced at AUS$449 thereby making it affordable

Place: The product will be available at major retailers, online showrooms, Apple stores and websites 

Promotion: Through integration of Apple’s message into all revolutionary advertisements along with launching a massive and planned television campaign for the product.

The expected wholesale revenue is $ 400 per unit with variable cost of about $200 per unit and estimated cost of about $40 million. The recommended price is $399 having a markup of close to about 30 percent. The sales volume is expected to increase by about 60 percent that will decrease impact on the fixed cost thereby improving the opportunities in increasing the production scale that will lead to the improvement of the profits in long run.

The objectives were achieved through control measures for closely monitoring the quality and the customer service satisfaction. The consumers could also contact the headquarters of Apple in case of any technical problems. Performance measurement is based on the revenue that the fitness smart watch from Apple in the new market.

Conclusion:

On a concluding note, it was drawn that the fitness smart watch has the potential of reaching close to $ 32.9 billion by the year 2020 thereby registering 67.6 percent CAGR. The company however has plans of satisfying the personal demands of the consumers through stability and improvement of performance.

References: 

Boran, M. 2017. Fitness trackers run into resistance over data security concerns. [online] Available at: https://www.irishtimes.com/business/technology/fitness-trackers-run-into-resistance-over-data-security-concerns-1.3119483 [Accessed 19 Dec. 2018].

Danova, T. 2015. Gauging Apple Watch’s huge opportunity in the luxury-wristwatch market. [online] Available at: https://www.businessinsider.in/Gauging-Apple-Watchs-huge-opportunity-in-the-luxury-wristwatch-market/articleshow/46461060.cms [Accessed 19 Dec. 2018].

Kovaoch, S. 2017. [online] Available at: https://www.businessinsider.in/I-used-to-hate-the-Apple-Watch-but-I-became-obsessed-after-using-it-as-a-fitness-tracker/articleshow/60873472.cms [Accessed 19 Dec. 2018].

Love, J. 2016. Apple hones marketing for Watch with focus on fitness. [online] Available at: https://www.reuters.com/article/us-apple-watch-idUSKCN11E06U [Accessed 19 Dec. 2018].

Orellano, V. and Savvides, L. 2018. Apple Watch 3 vs. Fitbit Versa: Which smartwatch should you buy?. [online] Available at: https://www.cnet.com/how-to/apple-watch-3-vs-fitbit-versa-which-smartwatch-should-you-buy-best-fitness-tracker/ [Accessed 19 Dec. 2018].

Pholan, D. 2018. Apple Sells 3.5 Million Apple Watches As Wearables Market Grows. [online] Available at: https://www.forbes.com/sites/davidphelan/2018/07/26/apple-sells-3-5-million-apple-watches-as-wearables-market-grows-fitbit-sales-garmin/#5f5a72382118 [Accessed 19 Dec. 2018].

Pressman, A. 2018. You’ll Never Guess the Top-Selling Smartwatch Worldwide Right Now. [online] Available at: https://fortune.com/2018/08/31/best-selling-smartwatches-apple-fitbit/ [Accessed 19 Dec. 2018].

Rear, J. 2018. The best fitness trackers. [online] Available at: https://www.telegraph.co.uk/recommended/leisure/best-fitness-trackers-watches/ [Accessed 19 Dec. 2018].

statista.com 2018. [online] Available at: https://www.statista.com/statistics/538237/global-smartwatch-unit-sales/ [Accessed 19 Dec. 2018].