To Dr. Morton: Attached you will find a copy of our secondary research findings and opportunities recommendations for Microsoft Band. These findings and recommendations will increase the target audience’s awareness and market share in the wearable technology market. Should you have any questions or concerns, please contact us [email protected]. We will gladly follow up with you in two weeks to ensure that our recommendations were well received. Sincerely, squAD Alicia Zurita Jessica Mandel Kristen Peebles Kim Sapp Sean Palmieri Avinash Bhikha Brianna Cryar Table of Contents Executive Summary………………………………………………………….....1 Problem Statement……………………………………………………………...3 Industry Analysis………………………………………………………………..3 Company Analysis………………………………………………………………4 Product/Brand Analysis………………………………………………………..7 Competitor Analysis……………………………………………………………8 Consumer Analysis……………………………………………………………10 Macro-Environmental Analysis……………………………………………...11 Market Analysis………………………………………………………………...13 Problems and Opportunities Analysis……………………………………..14 Opportunities Recommendation…………………………………………….16 Marketing Objectives…………………………………………………………..16 Recommended Marketing Strategy…………………………………………17 Target Market Profile…………………………………………………………..19 Profile……………………………………………………………………..20 Branding Positioning Statement……………………………………………..21 Communication Objectives…………………………………………………...22 Communication Strategy……………………………………………………...23 Media Strategy…………………………………………………………………..23 IMC Tactics……………………………………………………………………….24 Measurement and Evaluation Plan…………………………………………..30 Creative Brief…………………………………………………………………….31 Bibliography……………………………………………………………………..33 Executive Summary Our client, The Microsoft Band, is seeking to increase their market share in the wearable fitness technology market. We, the squAD agency, created a strategy campaign and a creative brief that will allow for Microsoft to increase product awareness. Our team started by reviewing secondary research, in an effort to gain insight about the wearable fitness technology market. We began by gathering information about: the industry as a whole, current trends, environmental factors, product analysis and competitors within the market. The information gathered during secondary research allowed for our team to determine the problems and opportunities the brand is facing and provide recommendations. We recommend that the Microsoft Band emphasize the features of the Band that inspire the user to lead a more fitness-oriented lifestyle. This trend is called, “Help Me Help Myself” (Mintel). Based on our research, we decided the best target market for the Band would be a female business professionals between the ages of 30 and 40. We created a fictional character who embodies the characteristics and values of the target market. Our first-person account was Angela, a business professional and mother, who leads a health conscious lifestyle. After establishing the factors that motivate the target market, we created two positioning statements. These statements allowed us to create a proposition statement featuring the desired attributes for fitness wearables. Utilizing prior research and analysis of the target 1 market, we established our communication objectives and the strategy we would implement to communicate with the intended audience. Next, we created a media strategy with integrated marketing communication tactics, which would help us create a successful campaign. To ensure success, we established tools to measure and evaluate the effectiveness of the campaign. Our last step was writing a creative brief. The brief outlines the most important information from our campaign to help the creative team understand how to best impact and reach the audience when developing advertisements. 2 Problem Statement The challenge Microsoft faces is to increase Microsoft Band’s market share in the wearable fitness technology market. Industry Analysis Industry The most relevant and applicable industry for the Microsoft Band is wearable fitness technology. However, according to the Standard Industrial Classification System, the Microsoft Band is relevant to Electronic Computers, 3571, and Physical Fitness Facilities, 7991 (OSHA). Of the wearable technology market, fitness and activity trackers make up 31.3 percent of the market, smart watches make up 43.2 percent, heart rate monitors at 20 percent followed by 5.5 percent for smart glasses (Tek Carta). Trends Trends that define this industry include the desire for activity-tracking devices in which personal health and exercise data can be collected. In 2012, the most commonly owned fitness device was a pedometer at 31 percent. In addition, in 2013, medical devices capable of transmitting data had the highest consumer interest (Statista). The importance of health and wellness has lead to the creation of apps that offer insight, help track progress and maintain goals while offering accessibility through integration across devices such as smartphones, laptops, tablets and wearable technology. 3 Other trends include maintaining connectivity on various social platforms such as social media sites, text messages and emails at all times. The importance of the individual with these new technological advancements focused on solving challenges of particular niche markets has become prominent in this industry too. Projections Industry growth projections for the wearable technology market are more than $30.2 billion in 2018 with a compound annual growth rate of 43.4 percent; the consumer market is expected to reach $22.1 billion (BCC Research). As well, the market volume is anticipated to reach 134 million units by 2018. It is also projected that in 2017 56.2 million units of fitness gadgets will be shipped globally (Statista). Sales in this industry are expected to flourish with one in five U.S. adults discussing their intent to purchase a wearable device within the next 12 months (Ipsos). Company Analysis Mission Microsoft’s mission is to “empower every person and every organization on the planet to achieve more.” Microsoft has ambitions to “reinvent productivity and business processes, build the intelligent cloud platform, create more personal computing” (Microsoft). 4 Brief History Microsoft was founded in 1975 by Bill Gates and Paul Allen in Albuquerque, New Mexico with the purpose of implementing their program language BASIC for Micro Instrumentation and Telemetry’s (MITS) microcomputers. A few years later, 1980, Microsoft partnered with IBM to write the operating system for its computers. However, in 1985, Microsoft launched Windows, their very own operating system. By the mid 1990s, 90 percent of the personal computer market share had been captured by Microsoft (Britannica). Today, Microsoft is the world’s largest software maker that offers various software products and services in relations to computing. With the release of the Microsoft Band, Microsoft is also incorporating an emphasis on fitness and wellness into their technology. Principal People Key people within the company of Microsoft Corporation include Bill Gates, the Founder and Technology Advisor and the President, Maria Klawe. As well, Terri List-Stoll is the Executive Vice President. The Chief Financial Officer and President is G. Mason Morfit. Satya Nadella and Charles Scharf are Chief Executive Officers; both John Stanton and John Thompson are chairmen (Microsoft). 5 Product Line With products in correlation to computing, Microsoft offers Windows operating systems for personal computers, servers, phones, etc. As well, Microsoft Office, Outlook e-mail, Skype, Cloud, online services, hardware and multimedia such as the Microsoft Band, Xbox and Surface are offered. Others among their product offerings include servers, developer tools, internet browsers such as Bing and MSN, business solutions, games/ entertainment and virus and security support (Microsoft). Microsoft’s total assets are $176.22 billion (Hoovers). Sales Microsoft has annual sales of $93 billion and an operating profit of $17 billion (Avention). As of the fiscal year of June 2015, Microsoft’s net revenue was $93.58 billion with a growth of 8 percent and a net income of $12.19 billion (Microsoft). Market Share Since its release in 2014, the Microsoft Band is still trying to penetrate the market. FitBit, Jawbone and Nike have 97 percent of the market share of wearable fitness technology. The remaining three percent is deemed other in which Microsoft is accounted for (Mobi Health News). Therefore, at this time, Microsoft has below three percent of the market share. 6 Product/Brand Analysis Brand Microsoft as a brand is one of the most valuable brands (Forbes, 2015). Microsoft’s strength is its brand ubiquity and cross-generational appeal. They are known for their software. Microsoft’s software can be found on their competitor’s hardware. For example, many Apple computers have Microsoft Office installed. Because of their strong presence and brand loyalty, Microsoft is able to focus more on what the software and what can the Microsoft Band do for the consumer than the Band itself. History The Microsoft band was announced in October of 2014 and was officially released in November of 2014. The Microsoft Band is a form of wearable technology but it associates itself more as fitness band than a “smartwatch.” Product Specifications The Microsoft Band measures 1.4 inches diagonally and weighs 10.6 ounces. The Microsoft Band has 10 sensors built into it. These sensors measure metrics like skin temperature, calories burned, number of steps and sleep. It