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New Product Development
Smart Life
MKT 6329
Rui Wang, Yueh-Hsun Lee
Chufan Zhang, Chao-Hui Yin
May 4, 2016
Smart Life
Background 1
Problem and consumer needs 1
Introduction and Product Description 1
Market Summary 2
Market trends and size
Target market
Channel
Competition
Product life cycle
Product concept
B2C service
Survey summary
Conjoint analysis
Services Introduction
Sales forecast-Bass Model
B2B service
Services Introduction
Cooperation Development
References
Background
Nowadays, more and more companies start to develop the wearable devices to follow the
market trend. In addition, people start to use plenty of health or sports apps to record their lives
to make it better. However, there is no platform to integrate all of the functions of those apps. In
other words, the apps are individually exist and not connect to each other. Therefore, the original
concept just comes into our minds.
Problem and Consumer’s Needs
To satisfy the need that increasing people who value their health more than before, we
would develop a new product in the personal health area. Nowadays, people care either how
many calories they eat every meal or if they intake some food to which they are not allowed.
For the most time what people want is not only good body shape but also the healthy
lifestyle. Therefore, it’s a potential market to design a product that can generate a health report
automatically based on the amount and what kind of food intake of a day, the frequency of
workout, and even the change in average heart rate and body fat.
Through the product, people can know their physical condition more. It will be much
easier for people to achieve the goal to lead their life happier and longer. In addition, our product
would be easy to use. That is, the product would not be hard to operate but be convenient for the
consumer.
Introduction and Product Description
Our product is to establish a platform to connect people with medical institutions
including research institutions and wearable companies, and sportswear companies as well. The
foundation of this platform is that we have a huge cloud database, collecting data from both sides
and also serving both sides with data. With this platform, we can provide series of services.
To personal users, we collect data from people who are using wearable devices. As we
know, wearable devices can collect data like heart beats, calories, walking steps, blood pressure,
sleep quality and also record user’s exercise situation. However, these daily data are numbers
and cannot tell you anything about your health. So, our service is to collect such data and analyze
it through research institution to provide weekly reports to people. In addition, our service user
can establish a long-term data record through the support of our database. Then, they can see
how their health condition changes. Furthermore, we also provide a reward system. Our
customers can get a reward from sportswear companies like product discount by taking exercise
to some degree in a week or a month.
To institutions and companies, we divide the service into two different parts. The first
part is that we provide data collected from our personal users to research institution for analysis
purpose. In exchange, we need these institutions to help us provide weekly health reports to our
individual users. The second part of our service is we collect users’ feedback and their evaluation
to wearable companies and sportswear companies so that they can know what customers want.
Market Summary:
Market Size and Trends:
According to a new survey from Makovsky and Kelton called “Pulse of Online Health,”
79% of Americans would be willing to use a wearable device to manage their health.
The following Exhibit from Statista shows how wearable devices will develop in the
United States. According to this Exhibit, the market value of wearable devices will increase
about 42.7% from 2016 to 2018, reaching 12,642 million US dollars.
Target Markets
Buyers:
B2C: Individuals who own wearable tech in the United States.
B2B: Research institutions, Wearable Tech companies, and organizations related to sports in the
United States.
According to Nielsen, “Nearly half of Americans are interested in owning wearable technology, and
48% of people who own it are young, between the ages of 18-34.” So, individuals who own wearable devices
are more acceptable to install the platform to record their data. Moreover, there are some B2B buyers on the
other side. We sell the overall but not personal data that collect from individual customers to research
institutions and other companies related to sports. Also, we will sell a platform for sports brand or gyms to post
their ads.
Some modern, wearable technology companies like Apple, Google, Microsoft, Fitbit Flex, Nike, etc.
reach the good sales volume. These companies provide their products to customers, and we integrate all
different system devices to the same platform. Therefore, customers will not lose their data even though they
change to various products with different systems such as switching from IOS to Android.
Channel
Because we are B2B and B2C business, we use two different ways to carry out our
channel strategy. In the light of “ The World Federation of Direct Selling Associations
(WFDSA) estimates that retail sales rose 6.4 percent to $182.8 billion in 2014, up from $171.8
billion in 2013, with all regions and three-quarters of direct selling countries posting gains”(by
Andrea Tortora).These most recent figures confirm the strength of direct selling.
● Direct selling (B2B)
We sell the database directly to the institutions (Medical Research centers,
wearable companies). We choose to use the channel strategy in B2B because we can
accurately know what consumers really need. Plus, we can make our consumer fully
understand our product and service as well.
● Selling through intermediaries/Direct selling (B2C)
We not only sell our product directly to our customer, but we also sell our product
to the customer through wearable companies. That is, the consumer can buy our
product from those institutions. The benefit of the selling through intermediaries is that
consumer would be convinced that our product is worth to buy. In other words, those
institutions certify our product.
Competition
“In 2015, 39.5 million U.S. adults 18 and overused wearable devices, including
smartwatches and fitness trackers.— an increase of 57.7 percent over 2014, according to
eMarketer. That growth will continue in 2016 and beyond, with 81.7 million adults using
wearables by 2018, the research firm says”(13 Wearable Tech Trends To Watch In 2016).
Some competitors emphasize the function of health and fitness as well. At the same time,
those companies can also record the data to benefit the consumer and lead their life convenient
and easier.
● Google Health Platform & Android wear
Google also conform to the trend of health and wisdom in the field of sports watches,
personal athletic performance, the relevant health data and other information will be
recorded through the wisdom of Android Wearable anywhere.
● Microsoft Health & Microsoft Band
The smartwatch can cross the platform to run not only on Windows Phone but also
iPhone and Android phone. In addition, it also has the function of heartbeat detection and
the two days battery life.
● Apple Health & Apple Watch
One of the flagship functions of Apple watch is Health and Fitness. Apple Watch
would develop reasonable exercise habits for users to achieve their fitness goals. In
addition, Apple Watch can use the accelerometer to calculate the amount of exercise
and calories burned, use heart rate sensor to measure heart rate, and use Wi-Fi and GPS
to measure distance and speed when there are outdoor sports. The consumer can share
their data of everyday physical activities to the app Health. The implementation will
integrate data to help users’ better fitness training.
Product life cycle
To some degree, the Smart Life platform is like other products, so it also has its life cycle
in the product development procedure. Based on the life cycle graph, we present the different
strategy for the different stage.
● Introduction
For the introduction stage, we try to make it as easy as possible for our potential
customers to use our data cloud service. The basic service will be entirely free to use, which
include the daily data collected through whatever wearable devices customers use, and a personal
health report will be automatically generated through our data analysis engine.We are going to
attract customers as many as possible in the first three years. This is the time for us to enlarge our
data cloud, which could help us cooperate with more medical research institutions and wearable
technology companies. In the opposite, the more pharmaceutical companies and wearable
technology companies cooperate with us, the more potential customers we could attract. The
introduction stage is about 3 to 5 years, which is shorter than the introduction stage of wearable
technology companies since our partial service is based wearable hardware, and the wearable
device market tends to step into the growth stage right now.
● Growth Stage
After the introduction stage, about 3 to 5 years later, our brand image will be enhanced,
and more and more customers come to realize the importance of the personal health data cloud.
Meanwhile more and more basic service users would like to try our premium service product.
More and more customers could enjoy the convenience brought by our service wherever you go.
Based on our estimation, the growth stage will last at least for five years. The strong promotion
plan will be implemented in the step to boost our service product sales. The quality of our service
based on the data cloud will be improved, since more and more customers, medical research
institution will be connected through our service.
● Maturity Stage
At the maturity stage, we will try to differentiate our service product by offering our
customer more customizable options and additional personal service. The brand loyalty will be
improved through our enhancement of our service quality and large service network we built
among customers, medical service provider including medical center around U.S., wearable
technology companies. We will lower the price premium service and create more marketing
segment for the unsaturated market, like younger generation. The time length of maturity stage is
estimated roughly between 15 and 20 years.
Product Concept
Smart Life, which is a platform, is able to connect to various technology wearable
devices with different operation systems. Once the users connect their own devices, all the health
data will be automatically uploaded to the platform(Smart Life). Once Smart Life gets health
data from users, it will send health report and diet suggestion to each user. Then, once Smart Life
contains enough database, we will sell analyzing results to institutions, sporting companies, and
wearable technology corporations. Also, the platform provides advertising areas for the
businesses to post, which is one of the income resources.
For the individual customer, Smart Life provides the reward system to get more
involvement from the users. Once the personal user reaches the benchmark, the system will show
reward options like coupons, discounts, or upgrade. For the business customer, Smart Life
provides a database to institutions which help personal users analyze their health reports and diet
suggestion. Moreover, Smart Life offers advertising for sporting brands companies and help
them to record how people use their products.
B2C Service
Survey Summary
We have finished small-scale survey by 2/26/2016, which includes 56 online
questionnaires. Our survey was designed to get demographic information, personal preference
and personal opinions about health data and wearable technology. Based on our target market
and the feature of our new product, most our respondents’ ages are under 45 years old, and most
of them have the bachelor degree or higher. To eliminate the gender bias, we tried to keep the
balance between the number of female respondents and male respondents. So our final survey
results included 23 females’ answers and 26 males’ (some of the survey questions were set of
logically skipped mode, so some respondents didn’t answer the gender question). Our new
product could have a better function performance if our users have already owned smart
wearable device. For the reason of that, our survey included the detailed questions about whether
our respondents use wearable technology, and how they feel about the wearable technology they
experienced.
We also put some questions about the innovative functions we could possibly add to our
new products in the survey to test how our respondents feel about them. We create some specific
questions to analyze how our respondents take exercise in daily life, what they care about when
they take exercise, even what kind of sports they like. For the very first stage, most our target
customers will be the wearable technology users. Based the survey, most innovative functions of
our new products cater our target customers’ needs well. The specific analysis will be given in
the following parts.
Types of the needs
To satisfy the customer needs, we did the survey to find some details in demographic part
of our customers. There are 50 people including 26 males, 23 females and 1 unknown in our
survey.(Exhibit 17) Due to the totally equal proportion of the gender, we could increase the
accuracy of our questionnaire to get rid of the bias on gender. Plus, because our target market is
focused on young generation, we invite 42 (85.7%) primary potential customers whose age is
from 18 to 34 years old to answer our questionnaire. However, we still invite five people from
age 35-44 years old (10.2%), one from 45-54 years old (2.0%) and one from 55-64 to states their
grounds(Exhibit 18). Besides, Those people who did our survey are mainly focused on three
categories of the level of the education. One is graduated from college (27.7%), one is some
graduate school (38.3%), and the other one is completed graduate school (25.5%), the rest are
graduated from high school (4.3%) and Ph.D. (4.3%) respectively.(Exhibit 19)
In another part, we did some research on the daily habit of consumers. For example, the
question 10 in our survey ask their favorite sports. Then we found that swimming accounts for
the highest proportion which is 28.8%. Secondly, Basketball which stands for 26.9% closely
followed behind. Thirdly, cycling and running are both responsible for 21.2% which placed the
rank No3. (Exhibit 9)Through the analysis of the sport habit, we can deeply understand the
consumer behavior which helps us to hit the B2C market easily. Besides, Question 11 ,12, 13 can
help us to know the consumer habit as well. In our analysis, there are 70.6% of them going to the
gym. (Exhibit 10)That is, the high proportion means that there would be a great chance to be
successful in our new product. Question 12 provide us the information about the frequency of
exercise in 30 days. Most of the people choose the option of “very frequently” (41.2%) and the
second popular option is “moderately frequently” which stands for 26.5%. Moreover,We can
find that only 20.5% of people do not exercise frequently as well.(Exhibit 11) Accordingly, we
know we can develop our new product to satisfy the customer need.
In addition, In Question 13, Except the choice “I do not follow any of these dietary
restriction”(47.1%), Most people choose “low sugar” (44.1%) for their answer.(Exhibit 12) In
other words, we could create some market share through knowing the consumer habit.
Buyer motivations
According to the survey, there are several needs we can conclude from customers and we
make these needs into list. Firstly, when we ask about what brands of wearable devices they have
ever used, 45% of respondents choose Apple Watch, 25% of respondents choose Jawbone
up.(Exhibit 2) Following this question, we find that 88.9% of respondents who have used Apple
Watch are still using this brand, 40% of respondents are still using Jawbone up, and that number
of Garmin is 100%.(Exhibit 4) We can see from the result that most customers prefer the brand
Apple, then are Jawbone and Garmin.
Secondly, we give the question to figure out how much our potential clients like to
receive professional advice based on their daily health data. And the result is that 88.4% of
respondents prefer to receive this service. In addition, about 23.1% of respondents choose
extremely like.(Exhibit 8) So, we can conclude that most customers are satisfied with this
service.
Thirdly, we ask customers in the survey to choose their favorite sports. Here is the result
in order. About 28.8% of respondents like swimming, 26.9% of respondents like basketball,
21.2% of respondents like running, 21.2% of respondents like cycling, 19.2% of respondents like
dancing, 17.3% of respondents like Yoga, 15.4% of respondents like tennis and so on.(Exhibit 9)
Then, customers are asked to answer the question that how often they have purchased
sportswear in the past three months. About 76.5% of respondents have purchased more than
once.(Exhibit 13) Furthermore, we also ask customers to answer whether they think they need
sportswear recommendation, and the result is that about 85.4% of respondents think they need
it.(Exhibit 15) This survey shows that customers need sportswear recommendation in their daily
life.
At last, we also give the question on nutrition tips to figure out whether our customers
need it based on their weekly exercise. Only 8.8% of respondents think they do not need
nutrition tips at all.(Exhibit 14) And in another question relate to this one, we ask customers if
they have bought nutrition in the last six months. About 70.6% of respondents say yes.(Exhibit
16) From the results of these two questions, we can conclude that most people need nutrition
products and nutrition tips.
Gaps left by current solutions
According to our survey results, most wearable technology respondents use Apple watch.
The number of Jawbone and Garmin users are equally second largest. The number of Fitbit users
comes the third, which is different with our secondary data results. One of the biggest gaps left
by these companies is that they lack a universal platform for their users to collect data, which
means the Fitbit users cannot upload their data to Apple Health. For the reason of that, wearable
technology users cannot change the device they use conveniently. Once they do not use their
previous wearable devices, their health data will be lost either. Another biggest gap is that these
companies failed to provide their customer most wanted function through the data they collect
from their customers. These smart device makers neglect what their customers want from their
active daily data. Combining the results of Q1 (Exhibit 1)and Q3 (Exhibit 3), we tell that most
wearable technology users they still would like to use wearable device after they used them for a
long time, and they even do not change the wearable technology brand easily, which means the
wearable technology customers have pretty good brand loyalty. But there are also many
respondents who are used to go to the gym, taking exercise regularly and care about their daily
health do not use wearable smart devices. We infer that the gaps we mentioned above make the
potential customers think the actual price of wearable devices are higher than they perceived
value.
Desirednew product benefits
Smart Life provides a platform which is able to record health data and to send health
reports to individual users as a routine. The Smart Life platform is capable of accepting any type
of system of wearable technology, so different brands of wrist bends which collect activity data
from customers can connect to Smart Life platform. Compared with traditional wearable
technology companies, Smart Life can not only collect data from customers and provide health
reports, but also give consumers credits when using Smart Life platform such as sporting
coupons, gyms discounts, and so on. Therefore, Smart Life provides a brand new product and
idea for all the human beings.
According to the survey by Smart Life, 23.08% of people in the United States are
Extremely like to receive the professional health report as a routine. There are 36.54% of people
in the United States are very like to receive the professional health report as a routine, and
28.85% of people in the United States are moderately like to receive the professional health
report as a routine(Exhibit 8). Thus, about 88.47% of people in the United States are willing to
accept the health report service, so Smart Life may obtain lots of potential market share if Smart
Life is launching.
Smart Life survey shows that people living in the United States care about their health.
Most of the people frequently exercise and buy professional sporting wears about one to two
times in the past three months. Also, most people are interested in different types of sports such
as basketball and swimming which are the two most popular sports in the United States,
Football, Soccer, Tennis, Volleyball, Running, Yoga, Dancing, and Cycling(Exhibit 9). The
variety of sporting categories in which Americans are interested provides a large market for
Smart Life to attract more sporting companies to post their advertising on our platform.
Furthermore, Smart Life also provides sporting wears coupons on Smart Life’s platform, which
is one of the desired benefits for all the clients.
According to the survey provided below, more than half of the people in the United
States care about their diet more. For example, the number thirteenth question is about dietary
restriction. There are 44.12% of the people in the survey with low sugar diet, 17.65% of people
with low salt diet, and some with a vegan diet(Exhibit 12). So, the benefits for customers will be
providing a list of restaurants which provide the health menu for people who have a particular
diet. Moreover, Smart Life will provide diet suggestions for customers who record their diet
regularly. The advice will combine with all the data like steps, heart rates, and calories and then
give an overview diet report.
Therefore, the desired new products benefits for customers are daily health report,
sporting coupons, restaurants discounts, and diet suggestion. The brand new ideas are doing
health reports and diet and protein recommendations for individual clients, which has never been
created by any companies. Furthermore, the coupons and discounts are also provided by clients
on the other side of business such as sporting businesses and restaurants. It can not only benefit
the individual customers to save money, but also help businesses to develop brand awareness,
market share, and sales volumes.
Conjoint Analysis
Based on the result of the survey, we then design the four functions that will be applied in
the B2C services. In addition, we used Conjoint Analysis to figure out whether these functions
are acceptable by our consumers. In our Conjoint Analysis, there are five attributes including
Professional advice, Reward system, Advertising, Social network and Price. After removing
several unreasonable alternatives, we get 26 different options. Then, we asked 20 people to
participate in this Conjoint Analysis to rate these various alternatives from 1 to 100. The
following table is our attributes model and average rating we received from 20 participants.
At the next step, we run the regression programme and get the result of intercept and
coefficients of the five attributes. Using these data, we calculate the utility of all the 26
alternatives. The result is as following:
From the table above, it is obvious that the fourth alternative is the highest one which has
90.66. And this alternative consist of all four functions and free price, so we prefer to using this
alternative as our ultimate product concept.
Services Design
Since we have determined the ultimate product concept, we then making these four
functions into real and detail services.
Professional advices/ Health report
The Professional advice and Health reports are our core services toward B2C customers.
There are two aspects in this service combination. One aspect is that we record our customers’
daily exercise state and eating habits such as how much exercise the customer does every day,
what kind of exercise the customer prefer doing and how much they eat every day. Then based
on these data we collect from customers’ wearable devices or customers’ updating, we provide
them with the professional advice from our big database. The another aspect is that we also
provide our customers with health report because the wearable device can record health data
such as heart rate, blood pressure, sleeping quality and calories. However, usually consumers
can not tell what these health data mean to them, then our health report can deal this problem.
Reward system
The Reward system is a bonus service that we highly recommend because we think this
service will have the positive effect to consumer satisfaction. In this service, we will provide
coupons to consumers, and these coupons can be used in buying sportswear and wearable
devices. Customers can receive coupons in two ways. The first way is that when the customer
reaches some exercise targets such as finishing the accumulated 200 miles of running or 400
miles of cycling. The second way to get these coupons is that our platform will track the using
situation of customers’ sportswear and wearable devices and judge whether customers should
change them to make sure sportswear and wearable devices always perform at perfect status.
When the change is needed, we will remind customers and send them coupons to stimulate
them to change. In addition, when customers receive coupons they will most likely getting them
on their favorite items which they have already signed on our platform.
On the other hand, as a platform, we will also provide B2B customers with data we
collect from customers like product real lifetime, product performance and customers’ feedback
so that B2B customers can improve their products.
Advertising
Advertising is an important section that can lead us to make profit. However, we are not
going to make this as common advertising that usually annoy customers. The first fiction of
advertising is that we only provide our customers with items according to their preference and if
customers do not want to see they will not see advertisement at all. The second fiction is that
our customers can label favorite products on advertisement so that when we provide coupons to
them we will focus on their favorite products.
Social network
It must be very boring if our customers using the perfect platform alone especially when
they reach some exercise targets, getting coupons or see something interesting. So based on
these need, we add social network to our platform including chatting, sharing, adding friends,
writing reviews and setting locations.
Sales forecast
The sales forecast of the B2C services is based on the Bass Model calculation method.
The formula is listed below:
S(t) = p(0)m + [q - p(0)]Y(t) - (q/m)[Y(t)]2
In this formula, the m which means potential market units equals
12642000000/42=301000000. And since our platform is a new idea in the personal health
industry, so we set the p and q at a low level compared to the average innovation rate and
imitation rate. Here we set p=0.002 and q=0.09. Then we calculate 40 seasons of sale units and
make it into a graphic.
B2B Services
Services Introduction
Cooperate with Sportswear Company and Consumable Sports Equipment Company
Based on our research on the TOP 10 brand of sportswear companies around the world,
every TOP 10 company has their own online store and online advertising and promotion
strategy. As far as we know, all famous sports wear around the world, they keep online
businesses since long time ago. However, they failed to deliver the their advertisement and
promotion information to their customers effectively. To online shopping industry, traditional
promotion method like Emailing advertisement, and pop up promotion information in
sponsorship website do not work in a efficient way. Another big problem for online sportswear
selling is that they lack a excellent review system to provide the evaluation about their products.
Sportswear company including sports consumable items companies, like Nike, Adidas, Trek
(one of the most famous bicycle manufacture companies in the world), need the real product
evaluation from their target customers. Their own official online stores and most third party
online selling companies lack enough valuable customer reviews, which is critical to sportswear
company’s product analysis. In a word, they lack valuable data comes from their customers and
their target markets. So in the most situation, sportswear companies fail to get feedback from
their customers, and customers do not have a way to express their ideas about products either.
As a cloud database platform company we focus on our customers’ health data,
meanwhile, most our customers take exercise regularly and they take care what kind of
sportswear they use in their daily lives. Briefly, our target customers have overlap with target
customers of sportswear companies. The advantage of Smart Life cloud database could provide
a new way of advertising and promotion to these sportswear online selling businesses. At the
same time, one of the significant function “Customer Review” could bridge the gap between the
valuable customer reviews and sportswear companies.
As product concept described above, we could put selective advertisement into our
mobile app without interfering the normal function of our application. Smart Life will analyze our
user’s exercise type and then we will based on our analysis result to select what kind of
advertisement our users might be interested in. What make the Smart Life different with other
traditional advertising and promotion method is the data stored in our cloud. On the Smart Life
platform, we set a function to track what is their core equipment in their exercise, like shoes are
cores equipment to runners. And our platform could record not only health data but also the
frequency of using these sportswears. The sportswear data we tracked through Smart Life could
help know our users know better about their sportswear, which is important to their exercise
quality. The analysis result from our data cloud will present these sportswear companies better
view how their customers use their product in daily lives, and when they need to replace their
old sportswear old sports equipments. Tracking our users’ sportswear data will benefit our
users’ using experience, and, at the same time, optimize sportswear companies product
analysis in a brand new way.
Cooperate with Medical Research Institution
Above our B2C analysis, the reason why we could provide our customers weekly health
report is that Medical Research Institution cooperate with Smart Life and provide personalized
health data analysis. Meanwhile, we also provide our customers’ health data within privacy
policy to Medical Research Institution to help these institutions gather research data around
United States. The most amazing feature about data we provided is “all real time”, which means
our data is 24/7. Medical Research Institution will match up their database with our cloud
database. The database sharing mechanic will benefit both of us in biodirection. Medical
research institution will obtain free access to our database, and we also obtain the most
valuable service -- authorized health report.
Cooperate with Wearable Technology Company
Another important fact we can not ignore is that most of our service based on wearable
technology, the most advanced wearable technology our customer uses, the more accurate
data we could collect from customer’s body. On the one hand, it is necessary for us to
popularize wearable device using, on the other hand, wearable technology could get higher
growth rate with our promotion.
Appendix
Exhibit 1
Exhibit
2
Exhibit
3
Exhibit 4
Exhibit 5
Exhibit 6
Exhibit 7
Exhibit 8
Exhibit 9
Exhibit 10
Exhibit 11
Exhibit 12
Exhibit 13
Exhibit 14
Exhibit 15
Exhibit 16
Exhibit 17
Exhibit 18
Exhibit 19
Reference
“13 Wearable Tech Trends To Watch In 2016” Web. Apr. 5 , 2016
https://business.officedepot.com/article/prelogin/healthcare/006fac3d0fb7a4d704006a2eafbb3945
Tortora, Andrea “Direct Selling Strength in the World’s Billion Dollar
Markets” Web. Apr. 5 , 2016
http://directsellingnews.com/index.php/view/direct_sellings_strength_in_the_worlds_billion_dollar_markets#.
VwRbs5MrKb8
“TECH-STYLES: ARE CONSUMERS REALLY INTERESTED IN WEARING
TECH ON THEIR SLEEVES?” Nielsen Web. Apr. 5 2016
http://www.nielsen.com/us/en/insights/news/2014/tech-styles-are-consumers-really-interested-in-
wearing-tech-on-their-sleeves.html
“Wearable Apps: Where We Are & Where We’re Going” Web. Apr. 5 , 2016
http://www.intellectsoft.net/community/development/wearable-apps-where-we-are-where-were-going

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SmartLife1.0.docx

  • 1. New Product Development Smart Life MKT 6329 Rui Wang, Yueh-Hsun Lee Chufan Zhang, Chao-Hui Yin May 4, 2016 Smart Life Background 1 Problem and consumer needs 1 Introduction and Product Description 1 Market Summary 2
  • 2. Market trends and size Target market Channel Competition Product life cycle Product concept B2C service Survey summary Conjoint analysis Services Introduction Sales forecast-Bass Model B2B service Services Introduction Cooperation Development References Background Nowadays, more and more companies start to develop the wearable devices to follow the market trend. In addition, people start to use plenty of health or sports apps to record their lives to make it better. However, there is no platform to integrate all of the functions of those apps. In other words, the apps are individually exist and not connect to each other. Therefore, the original concept just comes into our minds. Problem and Consumer’s Needs
  • 3. To satisfy the need that increasing people who value their health more than before, we would develop a new product in the personal health area. Nowadays, people care either how many calories they eat every meal or if they intake some food to which they are not allowed. For the most time what people want is not only good body shape but also the healthy lifestyle. Therefore, it’s a potential market to design a product that can generate a health report automatically based on the amount and what kind of food intake of a day, the frequency of workout, and even the change in average heart rate and body fat. Through the product, people can know their physical condition more. It will be much easier for people to achieve the goal to lead their life happier and longer. In addition, our product would be easy to use. That is, the product would not be hard to operate but be convenient for the consumer. Introduction and Product Description Our product is to establish a platform to connect people with medical institutions including research institutions and wearable companies, and sportswear companies as well. The foundation of this platform is that we have a huge cloud database, collecting data from both sides and also serving both sides with data. With this platform, we can provide series of services. To personal users, we collect data from people who are using wearable devices. As we know, wearable devices can collect data like heart beats, calories, walking steps, blood pressure, sleep quality and also record user’s exercise situation. However, these daily data are numbers and cannot tell you anything about your health. So, our service is to collect such data and analyze it through research institution to provide weekly reports to people. In addition, our service user can establish a long-term data record through the support of our database. Then, they can see how their health condition changes. Furthermore, we also provide a reward system. Our customers can get a reward from sportswear companies like product discount by taking exercise to some degree in a week or a month. To institutions and companies, we divide the service into two different parts. The first part is that we provide data collected from our personal users to research institution for analysis purpose. In exchange, we need these institutions to help us provide weekly health reports to our individual users. The second part of our service is we collect users’ feedback and their evaluation to wearable companies and sportswear companies so that they can know what customers want. Market Summary: Market Size and Trends:
  • 4. According to a new survey from Makovsky and Kelton called “Pulse of Online Health,” 79% of Americans would be willing to use a wearable device to manage their health. The following Exhibit from Statista shows how wearable devices will develop in the United States. According to this Exhibit, the market value of wearable devices will increase about 42.7% from 2016 to 2018, reaching 12,642 million US dollars. Target Markets Buyers: B2C: Individuals who own wearable tech in the United States. B2B: Research institutions, Wearable Tech companies, and organizations related to sports in the United States. According to Nielsen, “Nearly half of Americans are interested in owning wearable technology, and 48% of people who own it are young, between the ages of 18-34.” So, individuals who own wearable devices are more acceptable to install the platform to record their data. Moreover, there are some B2B buyers on the other side. We sell the overall but not personal data that collect from individual customers to research institutions and other companies related to sports. Also, we will sell a platform for sports brand or gyms to post their ads. Some modern, wearable technology companies like Apple, Google, Microsoft, Fitbit Flex, Nike, etc. reach the good sales volume. These companies provide their products to customers, and we integrate all different system devices to the same platform. Therefore, customers will not lose their data even though they
  • 5. change to various products with different systems such as switching from IOS to Android. Channel Because we are B2B and B2C business, we use two different ways to carry out our channel strategy. In the light of “ The World Federation of Direct Selling Associations (WFDSA) estimates that retail sales rose 6.4 percent to $182.8 billion in 2014, up from $171.8 billion in 2013, with all regions and three-quarters of direct selling countries posting gains”(by Andrea Tortora).These most recent figures confirm the strength of direct selling. ● Direct selling (B2B) We sell the database directly to the institutions (Medical Research centers, wearable companies). We choose to use the channel strategy in B2B because we can accurately know what consumers really need. Plus, we can make our consumer fully understand our product and service as well. ● Selling through intermediaries/Direct selling (B2C) We not only sell our product directly to our customer, but we also sell our product to the customer through wearable companies. That is, the consumer can buy our product from those institutions. The benefit of the selling through intermediaries is that consumer would be convinced that our product is worth to buy. In other words, those institutions certify our product. Competition “In 2015, 39.5 million U.S. adults 18 and overused wearable devices, including smartwatches and fitness trackers.— an increase of 57.7 percent over 2014, according to eMarketer. That growth will continue in 2016 and beyond, with 81.7 million adults using wearables by 2018, the research firm says”(13 Wearable Tech Trends To Watch In 2016). Some competitors emphasize the function of health and fitness as well. At the same time, those companies can also record the data to benefit the consumer and lead their life convenient and easier. ● Google Health Platform & Android wear Google also conform to the trend of health and wisdom in the field of sports watches, personal athletic performance, the relevant health data and other information will be recorded through the wisdom of Android Wearable anywhere.
  • 6. ● Microsoft Health & Microsoft Band The smartwatch can cross the platform to run not only on Windows Phone but also iPhone and Android phone. In addition, it also has the function of heartbeat detection and the two days battery life. ● Apple Health & Apple Watch One of the flagship functions of Apple watch is Health and Fitness. Apple Watch would develop reasonable exercise habits for users to achieve their fitness goals. In addition, Apple Watch can use the accelerometer to calculate the amount of exercise and calories burned, use heart rate sensor to measure heart rate, and use Wi-Fi and GPS to measure distance and speed when there are outdoor sports. The consumer can share their data of everyday physical activities to the app Health. The implementation will integrate data to help users’ better fitness training. Product life cycle To some degree, the Smart Life platform is like other products, so it also has its life cycle in the product development procedure. Based on the life cycle graph, we present the different strategy for the different stage. ● Introduction For the introduction stage, we try to make it as easy as possible for our potential customers to use our data cloud service. The basic service will be entirely free to use, which include the daily data collected through whatever wearable devices customers use, and a personal health report will be automatically generated through our data analysis engine.We are going to attract customers as many as possible in the first three years. This is the time for us to enlarge our data cloud, which could help us cooperate with more medical research institutions and wearable technology companies. In the opposite, the more pharmaceutical companies and wearable technology companies cooperate with us, the more potential customers we could attract. The introduction stage is about 3 to 5 years, which is shorter than the introduction stage of wearable technology companies since our partial service is based wearable hardware, and the wearable device market tends to step into the growth stage right now. ● Growth Stage
  • 7. After the introduction stage, about 3 to 5 years later, our brand image will be enhanced, and more and more customers come to realize the importance of the personal health data cloud. Meanwhile more and more basic service users would like to try our premium service product. More and more customers could enjoy the convenience brought by our service wherever you go. Based on our estimation, the growth stage will last at least for five years. The strong promotion plan will be implemented in the step to boost our service product sales. The quality of our service based on the data cloud will be improved, since more and more customers, medical research institution will be connected through our service. ● Maturity Stage At the maturity stage, we will try to differentiate our service product by offering our customer more customizable options and additional personal service. The brand loyalty will be improved through our enhancement of our service quality and large service network we built among customers, medical service provider including medical center around U.S., wearable technology companies. We will lower the price premium service and create more marketing segment for the unsaturated market, like younger generation. The time length of maturity stage is estimated roughly between 15 and 20 years. Product Concept Smart Life, which is a platform, is able to connect to various technology wearable devices with different operation systems. Once the users connect their own devices, all the health data will be automatically uploaded to the platform(Smart Life). Once Smart Life gets health data from users, it will send health report and diet suggestion to each user. Then, once Smart Life contains enough database, we will sell analyzing results to institutions, sporting companies, and wearable technology corporations. Also, the platform provides advertising areas for the businesses to post, which is one of the income resources. For the individual customer, Smart Life provides the reward system to get more involvement from the users. Once the personal user reaches the benchmark, the system will show reward options like coupons, discounts, or upgrade. For the business customer, Smart Life provides a database to institutions which help personal users analyze their health reports and diet suggestion. Moreover, Smart Life offers advertising for sporting brands companies and help them to record how people use their products.
  • 8. B2C Service Survey Summary We have finished small-scale survey by 2/26/2016, which includes 56 online questionnaires. Our survey was designed to get demographic information, personal preference and personal opinions about health data and wearable technology. Based on our target market and the feature of our new product, most our respondents’ ages are under 45 years old, and most of them have the bachelor degree or higher. To eliminate the gender bias, we tried to keep the balance between the number of female respondents and male respondents. So our final survey results included 23 females’ answers and 26 males’ (some of the survey questions were set of logically skipped mode, so some respondents didn’t answer the gender question). Our new product could have a better function performance if our users have already owned smart wearable device. For the reason of that, our survey included the detailed questions about whether our respondents use wearable technology, and how they feel about the wearable technology they experienced. We also put some questions about the innovative functions we could possibly add to our new products in the survey to test how our respondents feel about them. We create some specific questions to analyze how our respondents take exercise in daily life, what they care about when they take exercise, even what kind of sports they like. For the very first stage, most our target customers will be the wearable technology users. Based the survey, most innovative functions of our new products cater our target customers’ needs well. The specific analysis will be given in the following parts. Types of the needs To satisfy the customer needs, we did the survey to find some details in demographic part
  • 9. of our customers. There are 50 people including 26 males, 23 females and 1 unknown in our survey.(Exhibit 17) Due to the totally equal proportion of the gender, we could increase the accuracy of our questionnaire to get rid of the bias on gender. Plus, because our target market is focused on young generation, we invite 42 (85.7%) primary potential customers whose age is from 18 to 34 years old to answer our questionnaire. However, we still invite five people from age 35-44 years old (10.2%), one from 45-54 years old (2.0%) and one from 55-64 to states their grounds(Exhibit 18). Besides, Those people who did our survey are mainly focused on three categories of the level of the education. One is graduated from college (27.7%), one is some graduate school (38.3%), and the other one is completed graduate school (25.5%), the rest are graduated from high school (4.3%) and Ph.D. (4.3%) respectively.(Exhibit 19) In another part, we did some research on the daily habit of consumers. For example, the question 10 in our survey ask their favorite sports. Then we found that swimming accounts for the highest proportion which is 28.8%. Secondly, Basketball which stands for 26.9% closely followed behind. Thirdly, cycling and running are both responsible for 21.2% which placed the rank No3. (Exhibit 9)Through the analysis of the sport habit, we can deeply understand the consumer behavior which helps us to hit the B2C market easily. Besides, Question 11 ,12, 13 can help us to know the consumer habit as well. In our analysis, there are 70.6% of them going to the gym. (Exhibit 10)That is, the high proportion means that there would be a great chance to be successful in our new product. Question 12 provide us the information about the frequency of exercise in 30 days. Most of the people choose the option of “very frequently” (41.2%) and the second popular option is “moderately frequently” which stands for 26.5%. Moreover,We can find that only 20.5% of people do not exercise frequently as well.(Exhibit 11) Accordingly, we know we can develop our new product to satisfy the customer need.
  • 10. In addition, In Question 13, Except the choice “I do not follow any of these dietary restriction”(47.1%), Most people choose “low sugar” (44.1%) for their answer.(Exhibit 12) In other words, we could create some market share through knowing the consumer habit. Buyer motivations According to the survey, there are several needs we can conclude from customers and we make these needs into list. Firstly, when we ask about what brands of wearable devices they have ever used, 45% of respondents choose Apple Watch, 25% of respondents choose Jawbone up.(Exhibit 2) Following this question, we find that 88.9% of respondents who have used Apple Watch are still using this brand, 40% of respondents are still using Jawbone up, and that number of Garmin is 100%.(Exhibit 4) We can see from the result that most customers prefer the brand Apple, then are Jawbone and Garmin. Secondly, we give the question to figure out how much our potential clients like to receive professional advice based on their daily health data. And the result is that 88.4% of respondents prefer to receive this service. In addition, about 23.1% of respondents choose extremely like.(Exhibit 8) So, we can conclude that most customers are satisfied with this service. Thirdly, we ask customers in the survey to choose their favorite sports. Here is the result in order. About 28.8% of respondents like swimming, 26.9% of respondents like basketball, 21.2% of respondents like running, 21.2% of respondents like cycling, 19.2% of respondents like dancing, 17.3% of respondents like Yoga, 15.4% of respondents like tennis and so on.(Exhibit 9) Then, customers are asked to answer the question that how often they have purchased sportswear in the past three months. About 76.5% of respondents have purchased more than once.(Exhibit 13) Furthermore, we also ask customers to answer whether they think they need sportswear recommendation, and the result is that about 85.4% of respondents think they need
  • 11. it.(Exhibit 15) This survey shows that customers need sportswear recommendation in their daily life. At last, we also give the question on nutrition tips to figure out whether our customers need it based on their weekly exercise. Only 8.8% of respondents think they do not need nutrition tips at all.(Exhibit 14) And in another question relate to this one, we ask customers if they have bought nutrition in the last six months. About 70.6% of respondents say yes.(Exhibit 16) From the results of these two questions, we can conclude that most people need nutrition products and nutrition tips. Gaps left by current solutions According to our survey results, most wearable technology respondents use Apple watch. The number of Jawbone and Garmin users are equally second largest. The number of Fitbit users comes the third, which is different with our secondary data results. One of the biggest gaps left by these companies is that they lack a universal platform for their users to collect data, which means the Fitbit users cannot upload their data to Apple Health. For the reason of that, wearable technology users cannot change the device they use conveniently. Once they do not use their previous wearable devices, their health data will be lost either. Another biggest gap is that these companies failed to provide their customer most wanted function through the data they collect from their customers. These smart device makers neglect what their customers want from their active daily data. Combining the results of Q1 (Exhibit 1)and Q3 (Exhibit 3), we tell that most wearable technology users they still would like to use wearable device after they used them for a long time, and they even do not change the wearable technology brand easily, which means the wearable technology customers have pretty good brand loyalty. But there are also many respondents who are used to go to the gym, taking exercise regularly and care about their daily health do not use wearable smart devices. We infer that the gaps we mentioned above make the
  • 12. potential customers think the actual price of wearable devices are higher than they perceived value. Desirednew product benefits Smart Life provides a platform which is able to record health data and to send health reports to individual users as a routine. The Smart Life platform is capable of accepting any type of system of wearable technology, so different brands of wrist bends which collect activity data from customers can connect to Smart Life platform. Compared with traditional wearable technology companies, Smart Life can not only collect data from customers and provide health reports, but also give consumers credits when using Smart Life platform such as sporting coupons, gyms discounts, and so on. Therefore, Smart Life provides a brand new product and idea for all the human beings. According to the survey by Smart Life, 23.08% of people in the United States are Extremely like to receive the professional health report as a routine. There are 36.54% of people in the United States are very like to receive the professional health report as a routine, and 28.85% of people in the United States are moderately like to receive the professional health report as a routine(Exhibit 8). Thus, about 88.47% of people in the United States are willing to accept the health report service, so Smart Life may obtain lots of potential market share if Smart Life is launching. Smart Life survey shows that people living in the United States care about their health. Most of the people frequently exercise and buy professional sporting wears about one to two times in the past three months. Also, most people are interested in different types of sports such as basketball and swimming which are the two most popular sports in the United States, Football, Soccer, Tennis, Volleyball, Running, Yoga, Dancing, and Cycling(Exhibit 9). The variety of sporting categories in which Americans are interested provides a large market for
  • 13. Smart Life to attract more sporting companies to post their advertising on our platform. Furthermore, Smart Life also provides sporting wears coupons on Smart Life’s platform, which is one of the desired benefits for all the clients. According to the survey provided below, more than half of the people in the United States care about their diet more. For example, the number thirteenth question is about dietary restriction. There are 44.12% of the people in the survey with low sugar diet, 17.65% of people with low salt diet, and some with a vegan diet(Exhibit 12). So, the benefits for customers will be providing a list of restaurants which provide the health menu for people who have a particular diet. Moreover, Smart Life will provide diet suggestions for customers who record their diet regularly. The advice will combine with all the data like steps, heart rates, and calories and then give an overview diet report. Therefore, the desired new products benefits for customers are daily health report, sporting coupons, restaurants discounts, and diet suggestion. The brand new ideas are doing health reports and diet and protein recommendations for individual clients, which has never been created by any companies. Furthermore, the coupons and discounts are also provided by clients on the other side of business such as sporting businesses and restaurants. It can not only benefit the individual customers to save money, but also help businesses to develop brand awareness, market share, and sales volumes. Conjoint Analysis Based on the result of the survey, we then design the four functions that will be applied in the B2C services. In addition, we used Conjoint Analysis to figure out whether these functions are acceptable by our consumers. In our Conjoint Analysis, there are five attributes including Professional advice, Reward system, Advertising, Social network and Price. After removing several unreasonable alternatives, we get 26 different options. Then, we asked 20 people to
  • 14. participate in this Conjoint Analysis to rate these various alternatives from 1 to 100. The following table is our attributes model and average rating we received from 20 participants. At the next step, we run the regression programme and get the result of intercept and coefficients of the five attributes. Using these data, we calculate the utility of all the 26 alternatives. The result is as following:
  • 15. From the table above, it is obvious that the fourth alternative is the highest one which has 90.66. And this alternative consist of all four functions and free price, so we prefer to using this alternative as our ultimate product concept. Services Design Since we have determined the ultimate product concept, we then making these four functions into real and detail services. Professional advices/ Health report The Professional advice and Health reports are our core services toward B2C customers. There are two aspects in this service combination. One aspect is that we record our customers’ daily exercise state and eating habits such as how much exercise the customer does every day, what kind of exercise the customer prefer doing and how much they eat every day. Then based on these data we collect from customers’ wearable devices or customers’ updating, we provide them with the professional advice from our big database. The another aspect is that we also
  • 16. provide our customers with health report because the wearable device can record health data such as heart rate, blood pressure, sleeping quality and calories. However, usually consumers can not tell what these health data mean to them, then our health report can deal this problem. Reward system The Reward system is a bonus service that we highly recommend because we think this service will have the positive effect to consumer satisfaction. In this service, we will provide coupons to consumers, and these coupons can be used in buying sportswear and wearable devices. Customers can receive coupons in two ways. The first way is that when the customer reaches some exercise targets such as finishing the accumulated 200 miles of running or 400 miles of cycling. The second way to get these coupons is that our platform will track the using situation of customers’ sportswear and wearable devices and judge whether customers should change them to make sure sportswear and wearable devices always perform at perfect status. When the change is needed, we will remind customers and send them coupons to stimulate them to change. In addition, when customers receive coupons they will most likely getting them on their favorite items which they have already signed on our platform. On the other hand, as a platform, we will also provide B2B customers with data we collect from customers like product real lifetime, product performance and customers’ feedback so that B2B customers can improve their products. Advertising Advertising is an important section that can lead us to make profit. However, we are not going to make this as common advertising that usually annoy customers. The first fiction of advertising is that we only provide our customers with items according to their preference and if customers do not want to see they will not see advertisement at all. The second fiction is that our customers can label favorite products on advertisement so that when we provide coupons to them we will focus on their favorite products. Social network It must be very boring if our customers using the perfect platform alone especially when they reach some exercise targets, getting coupons or see something interesting. So based on these need, we add social network to our platform including chatting, sharing, adding friends, writing reviews and setting locations. Sales forecast The sales forecast of the B2C services is based on the Bass Model calculation method. The formula is listed below: S(t) = p(0)m + [q - p(0)]Y(t) - (q/m)[Y(t)]2 In this formula, the m which means potential market units equals 12642000000/42=301000000. And since our platform is a new idea in the personal health industry, so we set the p and q at a low level compared to the average innovation rate and
  • 17. imitation rate. Here we set p=0.002 and q=0.09. Then we calculate 40 seasons of sale units and make it into a graphic. B2B Services
  • 18. Services Introduction Cooperate with Sportswear Company and Consumable Sports Equipment Company Based on our research on the TOP 10 brand of sportswear companies around the world, every TOP 10 company has their own online store and online advertising and promotion strategy. As far as we know, all famous sports wear around the world, they keep online businesses since long time ago. However, they failed to deliver the their advertisement and promotion information to their customers effectively. To online shopping industry, traditional promotion method like Emailing advertisement, and pop up promotion information in sponsorship website do not work in a efficient way. Another big problem for online sportswear selling is that they lack a excellent review system to provide the evaluation about their products. Sportswear company including sports consumable items companies, like Nike, Adidas, Trek (one of the most famous bicycle manufacture companies in the world), need the real product evaluation from their target customers. Their own official online stores and most third party online selling companies lack enough valuable customer reviews, which is critical to sportswear company’s product analysis. In a word, they lack valuable data comes from their customers and their target markets. So in the most situation, sportswear companies fail to get feedback from their customers, and customers do not have a way to express their ideas about products either. As a cloud database platform company we focus on our customers’ health data, meanwhile, most our customers take exercise regularly and they take care what kind of sportswear they use in their daily lives. Briefly, our target customers have overlap with target customers of sportswear companies. The advantage of Smart Life cloud database could provide a new way of advertising and promotion to these sportswear online selling businesses. At the same time, one of the significant function “Customer Review” could bridge the gap between the valuable customer reviews and sportswear companies. As product concept described above, we could put selective advertisement into our mobile app without interfering the normal function of our application. Smart Life will analyze our user’s exercise type and then we will based on our analysis result to select what kind of advertisement our users might be interested in. What make the Smart Life different with other traditional advertising and promotion method is the data stored in our cloud. On the Smart Life platform, we set a function to track what is their core equipment in their exercise, like shoes are cores equipment to runners. And our platform could record not only health data but also the frequency of using these sportswears. The sportswear data we tracked through Smart Life could help know our users know better about their sportswear, which is important to their exercise quality. The analysis result from our data cloud will present these sportswear companies better view how their customers use their product in daily lives, and when they need to replace their old sportswear old sports equipments. Tracking our users’ sportswear data will benefit our
  • 19. users’ using experience, and, at the same time, optimize sportswear companies product analysis in a brand new way. Cooperate with Medical Research Institution Above our B2C analysis, the reason why we could provide our customers weekly health report is that Medical Research Institution cooperate with Smart Life and provide personalized health data analysis. Meanwhile, we also provide our customers’ health data within privacy policy to Medical Research Institution to help these institutions gather research data around United States. The most amazing feature about data we provided is “all real time”, which means our data is 24/7. Medical Research Institution will match up their database with our cloud database. The database sharing mechanic will benefit both of us in biodirection. Medical research institution will obtain free access to our database, and we also obtain the most valuable service -- authorized health report. Cooperate with Wearable Technology Company Another important fact we can not ignore is that most of our service based on wearable technology, the most advanced wearable technology our customer uses, the more accurate data we could collect from customer’s body. On the one hand, it is necessary for us to popularize wearable device using, on the other hand, wearable technology could get higher growth rate with our promotion.
  • 29. Reference “13 Wearable Tech Trends To Watch In 2016” Web. Apr. 5 , 2016 https://business.officedepot.com/article/prelogin/healthcare/006fac3d0fb7a4d704006a2eafbb3945
  • 30. Tortora, Andrea “Direct Selling Strength in the World’s Billion Dollar Markets” Web. Apr. 5 , 2016 http://directsellingnews.com/index.php/view/direct_sellings_strength_in_the_worlds_billion_dollar_markets#. VwRbs5MrKb8 “TECH-STYLES: ARE CONSUMERS REALLY INTERESTED IN WEARING TECH ON THEIR SLEEVES?” Nielsen Web. Apr. 5 2016 http://www.nielsen.com/us/en/insights/news/2014/tech-styles-are-consumers-really-interested-in- wearing-tech-on-their-sleeves.html “Wearable Apps: Where We Are & Where We’re Going” Web. Apr. 5 , 2016 http://www.intellectsoft.net/community/development/wearable-apps-where-we-are-where-were-going