MARKETING 231 PROFESSIONAL SELLING

Alissa Hawks
MKTG 231-005
TTH 12 PM

RESEARCH PAPER
Section I: Industry Information
(The industry your company participates)
1. What is the history of the industry from its inception to today?
The history of the Consumer Electronics industry traces as far back as the late
1800s. Although this industry had no direct founder, Thomas Edison is the one most
credited for creating this industry. Edisons inventions such as the electric typewriter,
and the phonograph, and most importantly, the Edison Effect, a device used to
control electricity, paved the way for the modern Consumer Electronics industry.
The radio gains credit as being the first actual consumer electronic device, as it
was electrical, although not the same radio we use today. In the 1890s, radio could
only transmit telegraphic dots and dashes. These early radios contributed to the
inventions of the telegraph and telephone. At the beginning of the 20th century,
radios were improved and transmitted voice and music. Radios were not even
available to the public until the 20s, which was around the same time that the first
radio stations were established. Without the radio, we would not have the electronic
devices we have today, such as the television, stereo systems, home theater
systems and many more.
By the end of the 20th century, 98% of the national population owned both radios
and televisions. The consumer electronics industry has seen more inventions during
the last 20 years than it did during the first 80 years since the inception of the
industry.
2. What is the size of the total industry in terms of sales? Is the industry growing?
Secure copies of articles that discuss the growth of the industry AND place
them in the inside jacket of the binder.
The U.S. consumer electronics industry currently has a market size of 224.3
billion U.S. dollars. The industry is continually growing, with a growth rate of about
2% per year. This is the largest the industry has ever been and analysts expect it to
continue to grow.
3. What are the industry advancements in recent years?
Analysts expect that industry advancements will drive sales and the growth of the
overall industry. Innovations such Ultra HD TV have experienced a 517% increase in
revenue since their inception, while LCD TVs will consist of 94% of digital televisions
sold. Smart phones have been a huge industry innovation in the last 10 years, and
have actually been at the front of the consumer electronics advancements. The
Samsung Galaxy Note Edge is a huge smart phone innovation, featuring curved
Gorilla Glass.
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References
http://encyclopedia.jrank.org/articles/pages/6483/Consumer-Electronics.html
http://www.statista.com/statistics/272115/revenue-growth-ce-industry/
http://anewdomain.net/2015/01/05/ces-2015-best-innovation-winners-roundup/

Section II: Company Information

(The company you represent)
1. What is the history of your company? When was the business founded and who
founded it? How has it changed throughout its history? What major accomplishments
has the company experienced in recent years? Secure articles about the company
and its products or services AND place them in the inside jacket of the binder.
James Park and Eric Friedman founded Fitbit in 2007. Park and Friedman shared
a vision of a wearable device that was capable of keeping track of the users activity.
Park and Friedman got their start-up capital by having friends and family invest in the
product. Only anticipating $400,000, they ended up raising over $1 million. In 2008,
Park and Friedman agreed to present their product to judges at TechCrunch 50. This
presentation allowed them to land 3,000 preorders of their unfinished product. 15
months later, the first Fitbit products shipped out to customers. Today, Fitbit operates
approximately 30,000 stores in 28 countries.
2. What is the size of the firm in terms of the number of employees and sales (if not
confidential)? If this is a publicly held company, secure a copy of its annual report
to stockholders (need only first three pages).
Fitbit currently employs 905 full time employees and has grossed sales of $400
million in just the second quarter. Analysts predict that Fitbit will have sales of $1.6
billion for the year 2015.
3. What products or services does the firm offer in its line? Be specific. Secure a
catalog, brochure, or list of these products or services. Choose a product or
service you will sell for your project.
Fitbit currently offers four categories of products. In the Everyday category, they
sell the Fitbit Zip, Fitbit One, Fitbit Flex, Fitbit Charge, and Fitbit Alta. The Active
category offers the Fitbit Charge HR and Fitbit Blaze. The Performance category
sells the Fitbit Surge and the Smart Scale category sells the Fitbit Aria. The Fitbit
Charge HR is the selected product.
4. What types of customers buy from this firm? Secure a list of customers (listed or
commented on website) of this firm.
Fitbits target market is customers that want to lead healthier lifestyles. People
that buy Fitbit products are generally health conscious, and value conscious. They
want a quality product at an affordable price.
5. Does the firm have branch offices or distribution centers? If so, where are they
located?
Fitbit currently possesses nine offices including their headquarters. While the
headquarters is located in San Francisco, they have offices in Boston, Dublin, Hong
Kong, Shanghai, Seoul, Minsk, New Delhi, and Tokyo.
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6. How many sales representatives does the firm employ in the local area? Secure
literature for training their salespeople. Find out what is appropriate attire for their
salespeople.
Information is not available.
7. During what months of the year does the firm enjoy its highest sales?
Fitbit earns its highest sales during the summer months, in June, July, and
August.
8. What is the firm's policy on extending credit to its customers? Are payment plans
available?
Fitbit does not extend credit to customers such as payment plans.
9. If the sales representatives of your company have an order form or contract that
customers sign, get a copy of it (if possible).
Fitbit does not utilize order forms or contracts.
10. Secure photographs of the office building and company personnel, if available. (web
photos are appropriate)

Fitbit Headquarters in San Francisco

James Park

Eric N. Friedman

CEO, President, Co-Founder

CTO, Co-Founder

11. List several reasons why customers should buy from this firm. Be specific.
Fitbit is currently the leading company in the fitness tracker sector. The company
offers a family of products to fit any budget and any goal. Their products work with a
variety of applications on every device. In addition, Fitbits products have the best
battery lives, and are the thinnest, and lightest in the industry.

References
https://pando.com/2014/02/04/fitbit-and-the-dark-ages-of-hardware/
http://finance.yahoo.com/q?s=FIT
https://investor.fitbit.com/press/press-releases/press-release-details/2015/FitbitReports-Second-Quarter-2015-Results/default.aspx

Section III: Prospect Information

(The company and person you are selling your product)
1. If you are selling to a business firm, choose an actual local customer your
company does business with and gather the following information for that
firm:
a. The firm:
i. What type of organization is it (e.g., manufacturer, wholesaler,
retailer, service firm)?
Nike Inc.s store brand is the Nike Factory Store, which is a retailer
that sells Nike products. Nike Factory Store operates both an online
website and brick-and-mortar stores.
2. How large is the firm in terms of the number of employees and sales volume (if not
confidential)? How long has it been in business?
Nike, Inc. employs 62,600 full time employees and grossed $30.7 billion in sales
for the year ended 2015. Nike, Inc. has been in business since 1964.
3. What product lines or services does it sell? Be specific.
Nike, Inc. sells athletic apparel, footwear, equipment, and accessories for men,
women, and children. In addition to Nike products, Nike, Inc. sells Jordan and Hurley
products.
Company Profile, usually found on website. Products and one product
advertisement
*SEE ATTACHMENTS*

a. The decision maker at this firm

The decision maker at Nike is its president and CEO Mark Parker. Parker
has been with Nike for over 30 years and has contributed to the creation of
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innovative product designs and the growth of its global business portfolio.

4. Who makes the buying decisions for your product or service at this firm? What is
the person's title and major responsibilities?
Eric Sprunk is the person responsible for the buying decisions of Nike, Inc.
Sprunk is the Chief Operating Officer and is in charge of Nikes manufacturing,
demand and supply forecasting, and procurement.

Mark Parker,
President & CEO

Eric Sprunk,
COO

5. What are the problems and needs of this firm? How can your product or service solve
the problems or satisfy the needs? Be as detailed and specific as possible. Identify
several problems and needs. What is the most important problem or need? Refer to
the discussion of problems and needs.
The main problem with Nike is that they outsource their manufacturing to other
countries where the cost to produce is much cheaper. These outsourced workers
often receive very little pay and the working conditions are not up to standards.
Unfortunately, Fitbit cannot solve this problem, but they will not contribute to it.
6. How can the prospect use your product or service?
Nike, Inc. could add the Fitbit Charge HR to their existing product lineup. The
product would fit well with the products that Nike, Inc. sells in the fact that they are
for fitness. Selling the Fitbit Charge HR would increase Nikes foot traffic and
increase their sales as well.
a. If you are selling a product to a wholesaler or retailer, who will resell it to
the ultimate consumer, (e.g., food product or stereo):
Nike, Inc. operates its own store called the Nike Factory Store, which
would sell the Fitbit Charge HR.

7. What are the characteristics of the typical consumer, such as age, income,
education, sex, family status, and occupation?
Nikes typical customers are between the ages of 18 and 40. Men and women
both buy Nike but more men than women buy. Customers of every socioeconomic
class buy Nike. Nike targets consumers who want to look athletic while also looking
stylish.
8. What problems or needs does the consumer have that your product solves? Be as
detailed as possible. Identify several problems and needs. What is the most
important problem or need?
Consumers want a fitness tracker that is accurate and has useful features. In
addition, they want a tracker that is comfortable and has a long battery life. Fitbit
devices are among the most accurate in the market and the company performs
many tests and studies to improve the accuracy of their products. Fitbit devices also
have several features all to support the users fitness data and have the best battery
life of fitness trackers in the market. Moreover, Fitbits products are made of a
flexible elastomer that makes wearing the device daily comfortable.
9.

If you are selling directly to the ultimate consumer, answer the questions in section
C above. The "ultimate consumer" is someone who buys a product or service for
his or her own personal consumption, such as buying a food product to eat, rather
than for a restaurant.
Question is not applicable.

References
http://www.marketwatch.com/investing/stock/nke/financials
http://about.nike.com/pages/executives
http://about.nike.com/pages/company-profile
http://brandongaille.com/18-incredible-nike-demographic-segmentation/
http://help.fitbit.com/articles/en_US/Help_article/How-accurate-are-Fitbittrackers/?l=en_US&c=Topics%3AAccuracy&fs=Search&pn=1

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Section IV: Product/Service Information

(What product are you selling)
1. General information:
a. Have sales for this product or service been growing or declining?
Information is not available.
b. Does the firm offer any warranties or guarantees? Get samples of the warranty or
guarantee statements.
Fitbit offers a limited product warranty, which reads as follows:
FITBIT, INC. ("FITBIT") WARRANTS TO THE ORIGINAL PURCHASER THAT YOUR
FITBIT ELECTRONIC DEVICE (THE "PRODUCT") SHALL BE FREE FROM DEFECTS
IN MATERIALS AND WORKMANSHIP UNDER NORMAL USE FOR A PERIOD OF
ONE (1) YEAR FROM THE DATE OF PURCHASE, EXCEPT THAT IF YOU RESIDE IN
THE EUROPEAN ECONOMIC AREA (EEA) AND YOU PURCHASED YOUR FITBIT
PRODUCT IN THE EEA, THE WARRANTY PERIOD IS TWO (2) YEARS FROM THE
DATE OF PURCHASE (THE "WARRANTY PERIOD").
FITBIT DOES NOT WARRANT THAT THE OPERATION OF THE PRODUCT WILL BE
UNINTERRUPTED OR ERROR-FREE. FITBIT IS NOT RESPONSIBLE FOR DAMAGE
ARISING FROM FAILURE TO FOLLOW INSTRUCTIONS RELATING TO THE
PRODUCT'S USE.
THIS LIMITED WARRANTY DOES NOT COVER SOFTWARE EMBEDDED IN THE
PRODUCT AND THE SERVICES PROVIDED BY FITBIT TO OWNERS OF THE
PRODUCT. REFER TO THE LICENSE AGREEMENT ACCOMPANYING THE
SOFTWARE AND THE FITBIT SERVICES TERMS OF USE FOR DETAILS OF YOUR
RIGHTS WITH RESPECT TO THEIR USE.

c. What price does your firm charge for its product or service? Are there any discounts? Secure a price list (if possible).
The price of the Fitbit Charge HR is $149.95 per unit. Fitbit does not offer
discounts.
d. How quickly can your company deliver its products or perform its service
from the date you write the order?
Fitbit can deliver its products one to five days from the date the order
originates. Five-day shipping is free, whereas expedited and overnight shipping
bears costs of $9.95 and $19.95 respectively.

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e. What are the typical reasons your company's customers give for not buying the
product or service? Identify several. How does the salesperson resolve each
customer objection?
Based on reviews, customers may have a few reasons for not buying the
Charge HR. Some users have been experiencing their device not charging or
syncing, or displaying inaccurate data. Fitbit has an excellent customer service
system and if a customer should experience any problems with their device, Fitbit is
available 24/7 for customer support. If the problem with the device is significant, Fitbit
generally sends a replacement device or can issue a money return.
f. What proof sources do salespeople use to convince prospects to buy (e.g.,
marketing research studies, product or user tests, test market data, and
endorsements from authorities or prominent people in the industry)? Secure some
letters sent to your company from satisfied customers (i.e., testimonial letters or
online comments). Ask a salesperson to tell you about two local customers who
have had good results with the product or service (case histories). Find out the
specific details, including who, what, when, where, and how.
Fitbit has a blog on its website called Buzz. Buzz allows users to view test
market data and customer reviews by product. It also allows customers to see
awards and recognition that Fitbit has gotten for its products. On the Buzz blog,
Fitbit has a profile of its Ambassador, Julianne Hough, a prominent endorser of
Fitbit products. Buzz also shares posts about Fitbit made by celebrities and
features a Celebrity Sightings section where it displays photos of celebrities
wearing Fitbit products.
g. What visual and audio aids do your salespeople use during sales presentations?
Get samples of them. NOTE: web links are appropriate.
Information is not available.
h. What advertising does the firm do, including co-op advertising? Get samples of
the web pages, advertisements, photo boards, or videotapes of television commercials, and audiotapes of radio commercials. Note the features and benefits
in the ads and commercials. Refer to the discussion of features and benefits.
Fitbit takes advantage of television, print, email, and social media as
advertising mediums. The companys advertisements generally consist of an
athlete exercising. As the athlete in the advertisement performs each activity, the
features of the device display in relation to the activity. A recent television
commercial by Fitbit called All the Fits showed a variety of different activities, all
which could be monitored by a Fitbit device. The point of the commercial is to
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convey the idea any activity you do, there is a Fitbit that will fit you.

i.

What is the estimated size of the average customer purchase in dollars and/or
units?
The average customer purchase consists of about one unit. The collective
device sold versus total registered users is precisely 1.09.

i. What services does your company offer their customer after a sale, including the
services its sales representatives provide? What are the specific features and
benefits of these services? Be as detailed as possible.
The service that Fitbit offers after a sale fall into customer support services
such as call support, online chat, and community forums. No information is
available about other services Fitbit provides.
j.

What are the typical problems customers have after the sale? How does your
company correct these problems?
The main problems that customers have after the sale are product
defects, such as the product not charging or syncing properly. In order to combat
these problems, customers are able to contact Fitbit via telephone, Twitter, email,
or live chat. In addition, customers may visit the Fitbit Community, which is a
customer forum, which features troubleshooting, and help threads.

2. If you are selling a product:

a. What is the history of the product? When the product invented? What are major
improvements of this product in recent years?
The Fitbit Charge HR developed in late 2014, with a release in early 2015.
Although no improvements have been on the Charge HR, the HR is an
improvement of the previous Fitbit Charge. The Fitbit Charge HR includes all of
the features of the Charge, except it monitors the users heart rate continuously,
allows access to overall heart health continuously, and boasts a 5-day battery
life.
b. What are the physical characteristics of the product? These characteristics
include construction, materials, and ingredients. How does the product perform?
What are the quality control procedures during manufacturing? What are the
features and benefits of these factors?
The Fitbit Charge HR has a wristband made of an elastomer material, with
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surgical steel fasteners. The device comes in five different colors such as black,
blue, plum, tangerine, and teal and comes in three different sizes, small, large,
and x-large. The elastomer wristband allows the device to be flexible, but also
durable and it does not contain latex. No information is available regarding the
manufacturing process.
c. Can you demonstrate your product?
One may demonstrate the product by displaying the screen and showing
the customer the purpose of each button.
d. Get a sample, WEB LINK, scale model, cross section, or photograph of the
product. Secure a specification sheet.
*SEE ATTACHMENTS*
3. If you are selling a product to a wholesaler or retailer, who will resell it to the
ultimate consumer:
a. What is the suggested retail price? What is the percentage of markup and profit
margin per unit?
The suggested retail price of the Fitbit Charge HR is $149.95. Information
regarding percentage of markup and profit margin per unit was not available.
b. What turnover rate can your customer expect on your product?
Fitbits inventory turnover, the measure of how fast Fitbit uses up its inventory
in a year is 0.92.
c. What sales promotional programs does your firm offer, including point-of-sale
material, contests, sweepstakes, coupons, sampling, and premiums? Get specific
details and examples of each.
Fitbit uses sales promotion programs such as contests and very rarely
coupons. In the past, Fitbit has had a shared incentive program that motivated
users to increase their steps. Users could track their movement against each
other on a scoreboard and compete with friends. Fitbit sometimes releases
promo codes for purchases on its website.
d. What product and sales training programs does your company make available to
its wholesalers, retailers, or dealers?
Fitbit does not offer product and sales training programs for its retailers.
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References
https://www.fitbit.com/legal/returns-and-warranty
https://blog.fitbit.com/fitbit-charge-charge-hr-surge-welcome-to-a-whole-new-world-of-fitness/
http://www.wareable.com/fitbit/fitbit-charge-charge-hr-features-release-date-specs-402
https://rockhealth.com/deconstructing-fitbit-s-1/
http://www.gurufocus.com/term/InventoryTurnover/FIT/Inventory+Turnover/Fitbit+Inc

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Section IV: Competitor Information

1. General information:
a. Who are your firm's main competitors? Identify one. Secure the information
that follows for this competitor.
Fitbit has several competitors that sell similar products. These competitors
include Garmin, Under Armour, Nike, Jawbone, and Apple. Their chief competitor
is Apple, with their new Apple Watch. The Apple Watch Sport is the most similar
to the Fitbit Charge HR.
b. What date did the competitor's firm start? Has your company been in business
longer? What is the size of the competitor in relationship to your firm? Is it
growing more quickly or more slowly than your firm is? If this is a publicly
held company, secure a copy of its annual report (1st three pages).
Apple started on April 1, 1976 by Steven Jobs and Steven Wozniak. Apple
had been in business for 31 years before Fitbit started. Apple also employs many
more employees than Fitbit, with 110,000 full time employees compared to
Fitbits 905 full time employees. Apple is growing faster than Fitbit, but Apples
faster growth rate is due to their reputation in the consumer electronics industry
and the wide variety of products they sell. Apple is already an established
company and a household name, whereas Fitbit has only now been becoming a
household name in the last 5 years.
c. What is the competitor's policy on extending credit to its customers? Are your
firm's policies more or less liberal?
Apple offers financing plans for its products if customers qualify for the
Barclaycard Visa credit card. The Barclaycard offers benefits such as interest free
promo periods and frequent buyer points. Fitbit currently does not extend credit to
its customers.
d. What price does your competitor charge for its product or service? Secure a
price list. Are there discounts? How does it compare to the price of your product
or service?
Apple Watch prices range from $350 to $17,000, with 40 different styles.
Besides seasonal discounts, Apple offers a student discount, which applies to its
watches. In comparison to Fitbit products, even the cheapest Apple Watch costs
more than the most expensive Fitbit product.
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e. How quickly can your competitor deliver its product or perform its service in
comparison with your firm?
All of Apples in-stock products come with free two day shipping. Fitbit will
deliver products within one to five days free of charge but for next day or two-day
shipping, they charge a fee. Apple is able to deliver its products much quicker
than Fitbit.
f. What services does the competitor offer its customers after a sale? How are your
services superior or inferior?
Apple offers both call support, and online support to customers. They also
include free software updates for their Watches on their website on the support
page. Fitbit also offers call and online support and free software updates.
Although both companies offer customers the same services, Apple remains the
number one company in post-sales support.
g. Secure copies of catalogs, WEB LINK EXAMPLES, brochures, charts, graphs, and
any other printed materials that are available.
*SEE ATTACHMENTS*
h. What are your competitor's major strengths and weaknesses?
As of 2015, Apples biggest strengths are its innovations and its
finances. Apple has a vast product family and creates several new products a
year. Most recently, Apple expanded its product family to include watches. In
terms of finances, Apple has seen a steady influx of cash ever since the
release of the first iPhone and to date has gross profits of $93.6 billion.
Apples main weakness is their premium pricing. Apples products are
among the priciest in its market. This opens the doors for competitors to
produce cheaper products that would cause Apples market share to decline.
3. If you are selling a product:
a. What is the history of the competitor's product? What year did it start? What
are the major improvements in recent years?
The Apple Watch developed in September of 2014 after nearly 10 years of
research and development. The Apple Watch released to the public in early 2015
and in just one year, $1.7 billion of sales grossed for just that product. There are
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rumors that Apple will be introducing an Apple Watch 2 in 2016 that will offer
improvements such as a faster processor, improved battery life, and better
displays. Health sensors, and Siri capabilities, and many more features will be
available as well.
b. What products does the competitor offer that your firm does/does not?
Apple offers a variety of products that Fitbit does not. Apples products
include desktop computers, laptops, cellular phones, tablets, and watches,
whereas Fitbit offers fitness trackers and a scale.
c. Secure a sample and specification sheet of the competitor's product. How is
your product superior and inferior in terms of features and benefits?
Fitbits Charge HR is superior to the Apple Watch Sport in the fact that it
can track not only the users heartrate, but also their distance traveled, calories
burned, and floors climbed, in addition to the workout stats it provides. The
Charge HR boasts a 5-day battery life compared to Apples Watch Sport that can
go 18 hours after a charge. The Charge HR also costs less than the Apple Watch
Sport. The product is inferior to Apples as it does not utilize the gyroscope
feature, or have an ambient light sensor, speaker, or mic. Apples Watch Sport is
also water resistant. Each product offers a unique benefit that the other does not
have.
d. If you are selling a product to a wholesaler or retailer, who will resell it to the
ultimate consumer:
Question is not applicable.
e. What is the percentage of markup and profit margin per unit your competitor
offers wholesalers or retailers? How does it compare with yours?
Information about the percentage of markup for both Fitbit and Apple was
not available, however, Apple has a profit margin of 22.87% whereas Fitbit has a
profit margin is 9.94%. This indicates that Apple makes more profit per unit than
Fitbit does.
f. How does the turnover rate of your product compared with that of your
competitor's product?
Information is not available.
4. What advertising support, INCLUDE WEB LINKS, does your competitor offer its
customers? How does it compare with yours? Get examples of the advertisements
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and television and radio commercials.

In terms of advertising, Apple utilizes television, print, billboards, out-of-home,
email, and social media as advertising mediums. Fitbit utilizes television, print, email,
and social media as advertising mediums. This gives Apple an advantage in
advertising.
a. What sales promotion programs does your competitor offer its customers? How
do they compare with yours?
Apple offers sales promotions on its products during the holiday season.
For example, last holiday season, the Apple Watch discounted by $100. Last
year, Fitbit offered a shared social incentive program for its sales promotion, in
which users helped feed people in need just by burning calories. Apples sales
promotions are usually discounts, whereas Fitbit has tried to generate goodwill in
order to increase their sales.
b. What training programs does your competitor offer its wholesalers and
retailers? How do they compare with yours?
Apple offers an Apple Certified Trainer Program (ATC) to educate and
certify industry professionals. This program is across all of its products and
ensures that all Apple employees and those who sell Apple products offer the
consistency and quality deemed up to Apples standards. Currently, Fitbit does
not offer training programs.

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References
http://venturebeat.com/2015/05/07/heres-what-fitbit-has-to-say-about-its-chief-competitorapple/
http://apple-history.com/h1
http://finance.yahoo.com/q/is?s=AAPL+Income+Statement&annual
http://www.apple.com/shop/browse/finance/instant_credit
http://www.apple.com/watch/buy/
https://www.macnn.com/articles/13/04/29/mac.maker.far.surpasses.rivals.even.bests.its.ow
n.previous.score/
http://www.knowthis.com/1996-sales-promotion-techniques-are-not-just-for-increasingsales-these-can-also-change-behavior
http://training.apple.com/act
http://finance.yahoo.com/q/ks?s=FIT+Key+Statistics
http://finance.yahoo.com/q/ks?s=AAPL+Key+Statistics
http://www.valueline.com/Stocks/Highlights/Apple_Inc___A_Short_SWOT_Analysis.aspx
http://www.businessinsider.com/a-timeline-of-how-the-apple-watch-was-created-2015-3

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