Fitness bracelets – if you are into your exercise, you will either have one or know someone that does.
For the last few years, there has been a fast and growing market in people tracking their heart rate, steps they walk a day etc. These gadgets have now evolved to track your sleep and link to your phone to be alerted to diary events and text messages.
One of the market leaders of this product is FitBit. Having started in 2007 when the founders identified that technology could ‘empower people to live a healthier and more acive life’.
As at 2015 Q3, FitBit is the biggest seller in the fitness wearables market.
How have FitBit developed their Brand?
One of the key competitive advantage that FitBit has is its attention to software. As its Co-Founder and CEO James Park mentions, “…2/3 of the engineers are in Software not hardware, it is what allowed us to take over the market so quickly”
The software allows you to form online networks, and compare performance against other users. This indirectly encourages users to market the product by word of mouth: Users encourage family, friends, colleagues to buy a FitBit and join the FitBit network so they can compete against each other. At Christmas 2015, FitBit was the No.1 fitness App in the Apple iStore, even though you need to spend at least $130 to purchase the product.
The new BLAZE
FitBit’s newest product release in 2016 is the FitBit Blaze – positioned in the SmartWatch category, putting it head to head against the iWatch and Samsung Gear.
Looking remarkably similar to an iWatch, it is priced at $270, which is close to the cheapest iWatch at $370.
Many reviews on the Blaze have commented that it does not introduce anything new to the market place. One such review is at Bidnessetc
With FitBit entering the SmartWatch category, an early entry is required to capture market share. (Srinavas et al 1994). According to Statista, Apple are already the market leader with their iWatch introduced in 2015 which in 1 year alone took away the leader position from Samsung.
Brand extensions can draw benefits from the Brand Equity. The responsiveness and awareness in media campaigns is greater for brand extensions, because of consumer familiarity with the name. Also, distribution on awareness is also greater, as the new product is normally marketed next to the brands other established products, thus benefiting from an existing traffic base (Buday 1989).
The New Blaze appears to fail from the lack of innovation and the benefits it can bring when going up against the current Smartwatches on the market. James Park assumption that people just want to buy smartwatches for health and fitness reasons maybe a sign of living in the past. This was further compounded by investors, when after the introduction of the Blaze at the highly regarded Consumer Electrics Show 2016, their share price fell by 20% .
Will the Blaze be a running success remains to be seen?
Posted by Thu Tran (Trthu)
Buday, T, 1989,”Capitalizing on Brand Extensions”, Journal of Consumer Marketing, Vol. 6 Iss 4 pp. 27 – 30
Thomadsen, R, 2012, ‘Seeking an Expanding Competitor: How Product Line Expansion Can Increase All Firms’ Profits’, Journal Of Marketing Research (JMR), 49, 3, pp. 349-360, Business Source Complete, EBSCOhost, viewed 22 April 2016.
Srinivas K. Reddy, Susan L. Holak, and Subodh Bhat 1994 To extend or not to extend: Success determinants of line extensions:, Journal of Marketing Research, pp. 243–262
Statista Website – The Statistics Portal, Retrieved 20 April 2016 – http://www.statista.com/statistics/422097/smartwatch-sales-worldwide-companies-market-share/
Bidnessetc Website – Fitbit Inc Stands At A Crossroads with the New Blaze Smartwatch Retrieved 20 April 2016 – http://www.bidnessetc.com/60748-fitbit-inc-stands-at-a-crossroads-with-the-new-blaze-smartwatch/
Forbes Website – How FitBit survived as a Hardware Startup, Retrieved on 19 April 2016 – http://www.forbes.com/sites/roberthof/2014/02/04/how-FitBit-survived-as-a-hardware-startup/#637b639c4f42