Market Research Final Report for Fitbit

Professor Aditya Gupta, MRKT 345 University of Nebraska-Lincoln

Prepared By: Courtney Van Hoosen, Vincent Bachteler, Victoria Katzberg, Jennifer Jones, Violette Al-Timimi, and Brittani Koster

Team Reputable Research

27 April 2016

Table of Contents

Executive Summary ........................................................................................................................ 1

Background ..................................................................................................................................... 3

Research Objectives ........................................................................................................................ 3

Qualitative Research ....................................................................................................................... 4

Focus Group ................................................................................................................................ 5 In-Depth Interviews ..................................................................................................................... 7

Quantitative Analysis & Final Research Hypotheses ..................................................................... 8

Hypothesis 1 ................................................................................................................................ 9

Hypothesis 2 .............................................................................................................................. 11

Hypothesis 3 .............................................................................................................................. 12

Hypothesis 4 .............................................................................................................................. 13

Hypothesis 5 .............................................................................................................................. 14

Hypothesis 6 .............................................................................................................................. 15 Hypothesis 7 .............................................................................................................................. 17

Recommendations ......................................................................................................................... 18

Conclusions ................................................................................................................................... 19

Appendix A, Focus Group Guide ................................................................................................. 20

Appendix B, In-Depth Interview Guide ........................................................................................ 21

Appendix C, Final Questionnaire ................................................................................................. 23

Appendix D, Statistical Tests ........................................................................................................ 30

Works Cited .................................................................................................................................. 33

1

Executive Summary

As the importance of leading a health-conscious lifestyle continues to grow in America,

the health wearable industry has also seen significant growth. For example, one in five adults

owned a wearable health tracker in 2014 according to the Health Research Institute (PwC Health

Research Institute 2014). Such a device includes the Fitbit, Apple Watch, and other products that

measure performance levels in physical activity as a wearable band. In order to examine this

industry in depth, the group chose to study and conduct market research on Fitbit.

A relatively young company, Fitbit was founded in 2007 with a goal of empowering and

inspiring its customer to live a healthier, more active life (Fitbit 2016). Given the rise of the

healthy lifestyle and Fitbit’s clear strength in this industry, the team designed five research

objectives to gain a better understanding of Fitbit as a company. The objectives, as well as the

reasoning behind each, are as follows:

1. Current position and competition – Allows Fitbit to evaluate their current market strength and compare itself to potentially threatening competitors, even as they’ve experienced growth

2. Consumer perspectives – Identify how Fitbit is perceived by current and potential customers so the company can capitalize or modify on certain perceptions

3. Industry trends – Recognize how the health wearable industry is performing, especially among rumors of it only being a fad

4. Effects on consumer health – Discover if Fitbit products and the company are truly making a positive impact on its consumers and if the company is achieving its mission

5. Future of Fitbit – Identify how Fitbit must innovate and develop in order to stay a major player in the game, especially among increased competition

In order to achieve our research objectives, the team began with ten hypotheses based on

the research objectives. Given these hypotheses, qualitative data collection methods were

designed in order to refine them. Thus, a focus group and three in-depth interviews were

conducted to evaluate the initial hypotheses. The focus group drew feedback from twelve

participants, with ages 19 and 23 years, and a mix of health wearable owners. Participants were

selected among team members’ friends who were familiar with a healthy lifestyle, and the focus

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group lasted about 30 minutes. Next, three participants, two female and one male, were chosen

from the focus group to further discuss Fitbit and the health wearable industry as in-depth

interviews. Topics covered for both methods of qualitative research included general attitude

towards the industry, perceptions about Fitbit, usage of health technology, and ideal features.

Based on the qualitative analysis, the team finalized the hypotheses to seven, and created

a survey for quantitative analysis. Multiple statistical tests were run on the 126 survey responses,

distributed via Facebook by team members, to draw conclusions about the hypotheses. Following

are the seven hypotheses, the statistical test used, and the acceptance decision:

1. Consumers believe that the Fitbit and health wearable industry as it is now is only a fad. – ACCEPT based on Z-test

2. Consumers would be more likely to purchase Fitbit if they added functions for dietary and food monitoring. – ACCEPT based on Z-test and Chi-square

3. Regardless of the price difference, consumers will still purchase the Apple Watch over the similar Fitbit Blaze. – ACCEPT based on Z-test

4. Consumers are less willing to purchase and use Fitbit products because of a lack in measurement accuracy. – ACCEPT based on bivariate correlation

5. Consumers would be more likely to buy Fitbit products if they were aware that third-party reports state that Fitbit products have a positive outcome on user health. – ACCEPT based on Z-test

6. Social influence is the most significant factor motivating consumers to use Fitbit products. – DO NOT ACCEPT based on Z-test and bivariate correlation

7. The average consumer using Fitbit products is focused more on cardio rather than lifting. – ACCEPT based on Z-test

After analyzing both qualitative and quantitative data, the team synthesized information

to create a few recommendations for Fitbit as a company, pertaining to the research objectives.

1. Publish research findings that show there are positive effects to consumers health when wearing a Fitbit.

2. Advertise the added features of the Fitbit app, including the social aspects of the app. 3. Continue to create new products and features of the Fitbit trackers to keep consumers

interested in Fitbit., i.e. nutrient and food monitoring abilities. 4. Pursue development in other areas of the health technology industry as fad dies down. 5. Target cardio users in particular for new Fitbit customers, and maybe look into high-

profile cardio athlete sponsor.

Overall, the illustrative research provided should help Fitbit continue to experience success.

3

Background

With a rise in living a health-conscious lifestyle in America, the wearable health tracking

industry has blossomed. Consider the following information. In 2014, one in five American

adults owned a wearable health tracker (PwC Health Research Institute 2014). In a recent study

of U.S. consumers, 42 percent believe that the average person’s athletic ability will improve

dramatically with the use of wearable technology (PwC Health Research Institute 2014). From

the business side of things, the Consumer Electronics Association predicts that these hopes will

drive consumers to purchase 38 million wearables in 2016, with fitness trackers growing by

roughly 12 percent (Taylor 2016). In such a growing and popular industry, there are many

competitors. However, one such major player synonymous with the industry is Fitbit.

In 2007, the founders of Fitbit, Eric Friedman and James Park, noticed the increase in

wireless technology and realized this rise could be paired with fitness. According to the

company’s mission statement, Fitbit is designed “to empower and inspire you to live a healthier,

more active life” (Fitbit 2016). Their wireless fitness products track steps, sleep patterns, heart

rates, and other metrics depending on the type of Fitbit owned. Some options include the Zip,

One, Flex and Charge. Fitbit also has more advanced trackers, like the ChargeHR, that has a

built-in heart monitor; the Surge with built-in GPS tracking; and their newest model, the Blaze,

that is a direct competitor of the Apple Watch with a color touchscreen. Each product tracks

daily steps, but higher priced models have added metric measurements. All seven products also

wirelessly sync to smartphones using Bluetooth and connect to a free Fitbit application.

Research Objectives

Given the rise of living a health-conscious lifestyle and Fitbit’s obvious strength for this

market, research objectives were designed to gain a better understanding of Fitbit’s public image

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and its effects. Specifically, the chosen research questions include identifying Fitbit’s

competition; consumer perspectives; industry trends; the success and health effects; and the

future of Fitbit.

The first research objective, current position and competition, is used to evaluate the

health wearable market and how Fitbit is placed among competitors. Fitbit has been growing

immensely, but it’s critical to compare its growth to that of its competitors in order to stay aware

of impending threats. Next, consumer perspectives, was chosen because there is a need to

understand how consumers feel about Fitbit. Despite an explosion of sales and increased market

share, some voices of dissent have risen, and Fitbit needs to capitalize on its positive perceptions

in order to retain loyalty. The third research objective, industry trends, is critical to grasp what

consumers will look for in the future of health wearables, and how companies can plan for that.

Since the market for health wearables has increased greatly, the team chose the fourth research

objective, effects on consumer health. This is vital for Fitbit in order to evaluate how well their

products are working in order to claim an impact on consumer health. Finally, the last research

objective selected is the future of Fitbit. While Fitbit has a great history, the future is more

important if the company hopes to remain successful. Given the rising competition and nature of

the industry, Fitbit must prepare for the future in order to retain its presence.

Qualitative Research

The first step in this market research involved composing ten initial research hypotheses

centered around the research objectives. Then, qualitative research methods were designed in

order to explore these hypotheses and refine them before conducting quantitative research. The

two methods chosen for the qualitative research included a focus group and in-depth interviews.

Below are the original ten hypotheses:

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1. FitBit sales will decrease in light of increased competition, such as price drops from the Apple Watch or Jawbone.

2. A new lawsuit covered by the media would noticeably decrease FitBit sales. 3. The continued growth in the health-conscious market will lead more companies to

subsidize health wearables for consumers. 4. If FitBit is able to provide concrete, scientific evidence of its positive effect on

consumers’ health, FitBit sales will significantly increase. 5. FitBit products are not significantly linked to improved health performance. 6. Adding stress trackers, blood pressure monitors, and other medical tools to FitBit would

increase sales and market share for the company. 7. If FitBit cannot innovate and compete with increasing technology in cell phone health

tracking, they will lose market share and sales will decrease. 8. The main motivation for consumers using Fitbit products is from the social motivation

and peer influence to work out rather than measuring metrics. 9. Consumers believe that the Fitbit and health wearable industry, as it is now, is only a fad. 10. The average consumer using Fitbit products is focused more on cardio rather than lifting.

Focus Group

Using the hypotheses, the group designed a focus group guide to collect qualitative data.

The focus group consisted of twelve members, chosen among team members’ friends and

connections, with seven females and five males. Ages ranged from 19 to 23 years old, with the

majority still in college. We chose this focus group makeup, including its mix of health wearable

status, in order to hone in on our target market (healthy-living college student) and gain a broad

perspective of Fitbit and the health wearable industry. Below is a chart depicting the

demographics of the focus group:

Table 1 Focus Group Demographics

Identifier Age College Student

Owns Health Wearable

Avg Days Worked Out/Week Employed

Male/ Female

Marital Status

AN 20 Y Fitbit 3 Part Time Female Single

MB* 21 Y Fitbit 0 No Female Single

GB 22 Y Fitbit 3 Part Time Female Single

KH 20 Y Apple Watch 2 Part Time Female Single

EI 20 Y Fitbit 4 Part Time Female Single

GY 21 Y None 5 No Male Single

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AR 19 Y Fitbit 2 No Male Single

KF* 22 Y None 2 Part-time Female Single

CF 23 N None 1 Full time Male Single

RR 23 N None 1 Full-time Male Single

AS* 21 Y None 7 Part-time Male Single

AH 21 Y None 0 Part-time Female Single

In preparation for the focus group, which lasted about 30 minutes, the team collaborated

on topics to discuss according to the research objectives. Seven topics were chosen, and the

moderator was given 2-3 probes to prompt group participation during slow times:

1. General attitudes towards the health conscious movement 2. General attitudes towards health wearables 3. Usage and purchase of health wearables 4. Characteristics of the ideal health wearable 5. General attitudes towards Fitbit products 6. Reactions to Fitbit concepts and positioning 7. General attitudes towards Fitbit’s ability to impact user health

After the focus group, each team member, including the moderator who led the

discussion, compared notes and shared comments after individual reflection. Several similar

points were broached by team members, so that five critical findings were chosen. The first

common theme stemmed from the participants’ belief that the Fitbit and other health wearables

are only a fad and are dying out. Second, participants believed the Fitbit was more useful for

motivation towards daily goals, rather than monitoring significant health progress. Next, we

discovered the average Fitbit consumer tended towards beginners and those who favored cardio.

In addition, consumers knowingly recognized that Fitbit’s data metrics are not significantly

accurate, but still used the produce. The final finding suggested consumers were more concerned

with monitoring food and nutrient intake in conjunction with daily activity rather than alone.

This focus group helped refine the hypotheses and design the interview guide for more opinions.

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In-Depth Interviews

Following the focus group, further qualitative analysis was conducted through three in-

depth interview sessions with participants from the focus group. The duplication of participation

allowed the team to build among the different ideas exposed in the focus group, express their

personal opinion in a relaxed setting with a friend rather than a group, and delve further into

different topics not covered in the focus group. These interview demographics were:

Table 2 Interview Demographics

Identifier Age College Student

Owns Health Wearable

Avg Days Worked Out Per Week

Employed Male/ Female

Marital Status

MB 21 Y Fitbit 0 No Female Single

KF 22 Y None 2 Part-time Female Single

AS 21 Y None 7 Part-time Male Single

As seen above, we intentionally chose to have at least one Fitbit owner and to have both female

and male participants in order to compare feedback across variations and limit bias.

When constructing the in-depth interview guide, we wanted to ask some similar questions

to those of the focus group in order to compare response from the participants and ensure peer

pressure was not a factor skewing our qualitative research results. Other questions and probes

were added, however, to get deeper insight about Fitbit. The in-depth interviews were designed

to have a personalized and welcoming environment so that the participant conducting the

interview could answer freely, thus resulting in the most honest responses. With these steps in

mind, the team hoped to prevent interview bias. Afterward, the information gathered from the

interviews helped restructure the ten initial hypotheses to refine them before beginning the final

task of constructing a survey and quantitative analysis.

Each of the three in-depth interviews lasted on average 20 minutes. The information

gathered during the sessions provided a clearer understanding of test market and primary target

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opinions. Upon group reflection, we found the participants shared similar ideas during the

interviews: a belief that society affects motivation of the health wearable user, the strength of

competition to Fitbit, and the variation of desired functions in a Fitbit among different users.

One common trend also brought to light from the in-depth interviews was the interaction

between society and how it affects other decisions. For example, two of the three interviewees

would likely use a health wearable product that is socially endorsed. One participant would

follow the health conscious trend largely if everyone was, and another participant would feel

more likely to buy a product if it had a personal recommendation by a close friend. At the other

end of the spectrum, although an individual may recognize a social movement, their beliefs may

not be affected by it whatsoever. For example, the final participant claimed that social motivation

does not affect their likelihood to buy a health wearable.

Finally, the interviews also alluded to Fitbit’s competitors. One such prominent player, in

direct competition with the Fitbit Blaze, is the Apple Watch. In all of the in-depth interviews, the

participants mentioned the competing brand and expressed brand loyalty to Apple. They believed

Apple to be superior to Fitbit, and thus were more likely to buy an Apple Watch compared to a

Fitbit Blaze regardless of the price difference. Participants placed a large emphasis on Apple’s

easy sync across all devices they already owned. Participants also mentioned a desire for

different abilities from the Fitbit, such as measuring the body’s vitamins and minerals. Lastly,

with another participant’s mention of her like of the silent alarm, our qualitative research

suggested there are various needs for consumers from Fitbit, even within the same demographic.

Quantitative Analysis & Final Research Hypotheses

After looking at the findings we received from the qualitative research portions, the focus

group and in-depth interviews, the team refined the original research hypotheses and conducted

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quantitative analysis to draw on when making recommendations to the company. The final

hypotheses were as follows:

1. Consumers believe that the Fitbit and health wearable industry as it is now is only a fad. 2. Consumers would be more likely to purchase Fitbit if they added functions for dietary

and food monitoring. 3. Regardless of the price difference, consumers will still purchase the Apple Watch over

the similar Fitbit Blaze. 4. Consumers are less willing to purchase and use Fitbit products because of a lack in

measurement accuracy. 5. Consumers would be more likely to buy Fitbit products if they were aware that third-

party reports state that Fitbit products have a positive outcome on user health. 6. Social influence is the most significant factor motivating consumers to use Fitbit products. 7. The average consumer using Fitbit products is focused more on cardio rather than lifting.

The best method to collect quantitative data for this case was a survey. After a brief test

survey completed by the group members, the team sent out a final survey consisting of 40

questions and six sections via Facebook. By the end of a three weeks, total respondents summed

to 160, but only 126 were completed entirely. In order to avoid bias from partial surveys, only

data from the 126 completed surveys will be used in quantitative analysis. The following

demographics also pertain to the survey respondents:

• 99 female vs. 27 male • Age range from 18 years to 53 years • Mean age of 22.367 years (average college age) • 105 current college students, 94 at the University of Nebraska-Lincoln • 118 identified as Caucasian

Note that the heavy skews towards college students, females, and high percentage of

Caucasian respondents may have resulted in a respondent bias coming into play in the analysis.

However, given the time and feasibility restraints for the survey, analysis was conducted on the

126 responses.

Hypothesis 1

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The first hypothesis is “Consumers believe that the Fitbit and health wearable industry, as

it is now, is only a fad.” This hypothesis targeted the research objectives of industry trends and

the current position of Fitbit. In order to avoid bias in the survey, a direct question for this

hypothesis was not asked. Rather, the group conducted analysis on the knowledge of consumers

recognizing a health wearable and the likelihood of non-owners buying a health wearable.

The first question analyzed read “Were you aware of what a health wearable is before

this survey?” To begin, the team ran descriptive statistics. Of the 126 responses to the survey,

111 (88.1 percent) answered “Yes”, with a mean score of 1.119 towards “Yes”. Since the

majority of the respondents knew health wearables before the survey, it is conceivable that its

high recognition indicate the market is reaching saturation and the industry may soon decline in

popularity. These points will be further strengthened by the following analysis.

The second question studied was “If you do not currently own a health wearable, how

likely is it that you will buy one in the future?” Respondents answered this survey by ranking the

likelihood on a five-point Likert scale, with “1” being “Extremely likely” and “5” being

“Extremely unlikely.” Since the question pertained only to non-owners, only 68 responses were

analyzed. The overall mean for the question calculated as 3.25, leaning more towards non-

owners being unlikely to purchase a health wearable. In fact, 45.6 percent of respondents chose

“Unlikely” or “Extremely unlikely” for this question (see Graph 1).

In order to test the hypothesis with, a

one-tailed Z-test was used. Our null

hypothesis read the observed value is greater

than or equal to 3, while the alternate

hypothesis stated that the observed value is less than 3. After running the test, the observed Z-

0

5

10

15

20

ExtremelyLikely

Likely Neutral Unlikely ExtremelyUnlikely

Graph 1

11

value was 1.633, which is less than the 1.645 Z-score at of 95 percent confidence (see Appendix

D, Figure 1). Thus, we fail to reject the null hypothesis. This means that it is statistically likely

that non-owners are unlikely to purchase a health wearable. Combined with the analysis from the

first question, we accept Hypothesis 1 and claim that the health wearable industry is only a fad.

Hypothesis 2

The second hypothesis analyzed was “Consumers would be more likely to purchase Fitbit

if they added functions for dietary and food monitoring.” In order to draw conclusions about this

hypothesis that targeted Fitbit’s future, two questions were once again studied. The first asked

respondents to rank the top three features necessary in a health wearable. Of these, nutrient and

intake capabilities received a top three vote from 16 (12.7 percent) of the 126 respondents.

Although this number is not as high as expected, it was one of the highest percentages compared

to the other 18 choices, suggesting consumers do value these capabilities.

The next question asked “How likely is it that a health wearable with added capabilities

of nutrient and food intake monitoring would have a positive impact on your decision to

purchase one?” (see Graph 2). Once again, the likelihood was listed on a five-point Likert scale,

with “5” being “Extremely likely” and “1” being “Extremely unlikely.” The mean score was

3.603, with the 126 respondents more than likely to

purchase a health wearable and Fitbit with these

added functions. However, further quantitative

analysis of a one-tailed Z-test was done, with the

null hypothesis of the observed value being less than or equal to 3 (neutral) versus the alternate

hypothesis of the observed value being greater than 3. Given the analysis, the observed Z-score

0 10 20 30 40 50

ExtremelyLikely

Likely

Neutral

Unlikely

ExtremelyUnlikely Graph 2

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of 6.137 was greater than the 1.645 95 percent critical value, and the null hypothesis was rejected

(see Appendix D, Figure 2.1). Thus, it is statistically significant that adding nutrient and food

intake functions to Fitbit will have a positive impact on consumer purchase likelihood. In turn,

we can accept Hypothesis 2. This corresponds with the findings we had in our qualitative

research, with reasons founded in consumers’ desire to live a healthy lifestyle.

Although the data analysis conducted allowed us to accept the hypothesis, further

analysis using a Chi-squared test explored if there was a relationship between current Fitbit

ownership and positive impact of the added dietary functions on purchase behavior. See

Appendix D, Figure 2.2 for the Chi-square distribution matrix. After totaling the data the

calculated P value was 0.0501. Although very close to our critical value of 0.05, we must fail to

reject the null hypothesis and conclude there is no relationship at 95 percent confidence between

Fitbit ownership and impact of added functions. Thus, Fitbit owners and non-Fitbit owners have

an equally likely to have a positive change on purchase likeliness with these added functions.

Hypothesis 3

The third hypothesis claims “Regardless of the price difference, consumers will purchase

the Apple Watch over the similar Fitbit Blaze.” The question “If the Apple Watch and the Fitbit

Blaze had the exact same features and the exact same price, which would you be more likely to

buy?” allowed us to examine consumer perceptions of the brands. Note that based on our

variables, only 98 responses were viable for this analysis. This question had three options for

respondents to choose from: the Apple Watch “1”, no preference “2”, and the Fitbit Blaze “3”.

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To begin, descriptive statistics told us the mean score of 1.724

leaned towards the Apple Watch. For the quantitative analysis, a one-

tailed Z-test was chosen. This time, the expected value was set at 2, “no

preference”. The null hypothesis suggested the observed Z-value would

be greater than or equal to 2, while the alternate said the observed value

would be less than 2. Computations gave us an observed Z-score of 3.132, which allows us to

reject the null hypothesis against the 1.645 critical value of 95 percent confidence (see Appendix

D, Figure 3). Thus, we can conclude consumers would be statistically more likely to choose the

Apple Watch over the Fitbit Blaze given no price or feature differences, and we can accept

Hypothesis 3.

In case the option of “no preference” affected our analysis, we also did the same tests

without this option, giving us 81 respondents. The mean score still skewed towards the Apple

Watch at 1.333. The null hypothesis stated the observed value is greater than or equal to the

expected 1.5, while the alternate research hypothesis claimed it would be less than 1.5.

Surprisingly, even without the “no preference” option, we computed a very similar Z-score of

3.162. Since it is still greater than 1.645 we can reject the null hypothesis and once again accept

Hypothesis 3 that consumers still prefer the Apple Watch (see Appendix D, Figure 3.2). This

corroborates the additional descriptive statistics, considering two-thirds of respondents chose the

Apple Watch over the Fitbit Blaze. According to our survey answers and qualitative findings, a

large part of this preference likely stems from Apple’s variety of products, consumers’

perception of Apple as prestigious, and the desire to sync all devices.

Hypothesis 4

AppleWatch

NoPreference

FitbitBlaze

Graph 3

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Our fourth hypothesis states consumers are less

willing to purchase and use Fitbit products because of a lack

in measurement accuracy. For this analysis, a bivariate

correlation was conducted using two questions. Consumer

perceptions of Fitbit accuracy was measured by the question,

“How accurate do you think Fitbit monitoring is for features

like calories burned, heart rate monitoring, steps, etc.?” Participants answered five-point scale,

with “1” as “Very Accurate” and “5” as “Not Accurate at All” (see Graph 4). The likelihood of

non-Fitbit users to purchase a Fitbit was measured by participant responses to the question

previously used for Hypothesis 1, “If you do not currently own a health wearable, how likely is it

that you will buy one in the future?” Note that only 68 responses overlapped from the two

questions.

The null hypothesis of our correlation analysis was that there is no correlation between

these two variables. After running the test, we found the correlation between accuracy

perceptions and the likelihood of Fitbit purchase was 0.274 (see Appendix D, Figure 4). This

resulted in a P value of 0.024, which is smaller than the critical value of 0.05 and allows us to

reject the null hypothesis. Thus, there is a weak, positive correlation of 0.274 between the two

variables. According to the answer scales, this means as the perceived accuracy of Fitbit

decreases (values move towards 5), the likelihood of non-owners to purchase a Fitbit decrease

(value move towards 5). Because there is a correlation, although weak, we accept Hypothesis 4.

Hypothesis 5

Our fifth hypothesis states “Consumers would be more likely to buy Fitbit products if

they were aware that third-party reports state that Fitbit products have a positive outcome on user

0102030405060

Graph 4

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health”. This test again called for a one-tailed Z-test with the

survey question, “Suppose that a reputable third party research

organization releases a verified report with scientific evidence

that suggests Fitbit products have a positive outcome on user

health. Please rank how this would affect the likelihood of

buying a Fitbit.” The response choices were based on a five-point scale, where 1 is “Extremely

Unlikely” and 5 is “Extremely Likely”, with 126 respondents (see Graph 5).

The null hypothesis for our Z-test was that the expected value of our

responses would be less than or equal to 3. We chose 3 since it marks the middle neutral, and any

value greater, as our alternate hypothesis states, means consumers would be more likely to buy a

Fitbit. The test computed an observed Z-score of 7.333, which allows us to reject our null

hypothesis based on a critical value of 1.645 (see Appendix D, Figure 5). Because that data

allows rejects the null hypothesis, we can conclude consumers would indeed be more likely to

buy Fitbit products if they were aware that third-party reports state that Fitbit products have a

positive outcome on user health. Thus, we accept Hypothesis 5.

Hypothesis 6

The sixth hypothesis states “Social influence is the most significant factor motivating

consumers to use Fitbit products.” In order to test this hypothesis we did a one sided Z-

test. This Z-test compared the observed Z-scores among the influential factors from the

following survey question: “Influential factors for buying a health wearables. Please select the

following reasons for owning a health wearable that apply to you?” The response choices for

this survey question are the following sixth statements:

• I am competing against my friends on social media.

0102030405060

Graph 5

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• I like to monitor my daily activity levels. • I am trying to lose weight. • The health wearables makes me appear cool and fashionable. • I was given the health wearables as a gift. I am trying to live a healthy lifestyle.

These response choices are based on a five-point scale, where 1 is

Strongly agree and 5 is Strongly disagree.

Z-tests were conducted for each influential factor, and

compared on a case by case basis for significance. The null

hypothesis for each was the observed value is greater than or equal

to 3, while the alternate hypothesis for the test was the observed

value is less than 3, meaning that it would be more likely to be an influential factor. The

following Z-scores were calculated from the test, and rejected or failed to reject based on

individual Z-scores. Note that the factors are arranged in decreasing order of statistical

significance as an influential factor. All factors were compared to a 1.645 critical value for a 95

percent confidence interval (see Appendix D, Figure 6.1).

• #1 I like to monitor my daily activity levels: 27.362, Reject Null • #2 I am trying to live a healthy lifestyle: 20.129, Reject Null • #3 I am trying to lose weight: 5.961, Reject Null • #4 I am competing against my friends on social media: 5.441, Reject Null • #5 The health wearable makes me appear cool: 2.964, Reject Null • I was given the health wearable: 0.306, Failure to reject

Looking at the data above, we found that five of the six factors were considered

influential, with the factor of the health wearable being a gift playing no statistically significant

role in the decision. In regards to our Hypothesis 6, we do not accept it considering that social

media is the fourth most influential factor, only above the factor that the wearable makes its user

appear cool. The Z-tests were also corroborated by the descriptive statistics, as the mean for

05

101520253035404550

SocialM

edia

DailyAcIvity

LoseW

eight

Cool&

GiP

HealthyLifestyle

Other

Graph 6

17

daily activity was the lowest score at 1.304, meaning customers strongly agreed it was an

influential factor (see Graph 6).

One final test was conducted for this hypothesis, a correlation test between the likelihood

to buy a Fitbit if one was not owned currently, and which factor was the most significant. The

correlation test gave us results of a 0.300 correlation coefficient (see Appendix D, Figure 6.2).

Given this figure, we see that there is evidence of a moderate positive relationship between the

two variables, suggesting that depending on the most influential factor, the likelihood for

purchase by non-owners would likely decrease (values increase). However, this analysis was

difficult to run using correlation since the only information collected for influential factors was

based on what the most significant factor was instead of how influential would each factor be.

Thus, we still do not accept Hypothesis 6, but suggest additional research is conducted in this

area and the influential factors for customers.

Hypothesis 7

The seventh hypothesis we tested states “The average consumer using Fitbit products is

focused more on cardio rather than lifting.” In order to test this hypothesis, we did a one sided

Z-test on the answers to the following survey question: “Do you think

the average user of a Fitbit is most likely to be a cardio person or weight

lifting person?”. The answers to this survey question included “1”

Cardio, “2” Weightlifting, and “3” neither.

Looking at the descriptive statistics for this question, it is clear

that consumers largely thought cardio was the most likely use for the Fitbit: an overwhelming

96.8 percent selected this choice (see Graph 7). However, it’s always good to conduct statistical

tests in the name of significance. Thus, the null hypothesis for our Z-test states that the observed

Cardio

WeightliPing

Neither

Graph 7

18

value is greater than or equal to 2 (weight lifting or neither), and the alternate hypothesis

suggests that the observed value is less than 2 (cardio). With a Z-score of 33.376, we can reject

the null hypothesis compared to 1.645 at 95 percent confidence (see Appendix D, Figure

7). Thus, consumers are statistically more likely to believe Fitbit users are largely cardio users

compared to weightlifting-focused individuals. The mean score of 1.056 also allows us to

conclude this fact. Thus, we accept Hypothesis 7.

Recommendations

In examining both our qualitative and quantitative research findings, our group created

five recommendations that we believe would better improve Fitbit as a company and attract a

greater customer base. Our first recommendation is to have Fitbit encourage a third-party

company to conduct and publish research findings that show there are positive effects to

consumers health when wearing a Fitbit. Given the report findings are positive, this would allow

customers to know the product is reliable and accurate and eliminate this hesitation for some

potential buyers.

Secondly, we believe that if Fitbit advertises more on the added features of the Fitbit app,

including the social aspects, customer would be more likely to purchase this product. Although

social media was not necessarily the most influential factor, it was still significant and played a

role in the consumer’s decision. Plus, not many users knew or used the social media aspect built

into the app, Friend Tab.

For the next recommendation, Fitbit needs to continue to create new products and

features of the Fitbit trackers to keep consumers interested in Fitbit., i.e. nutrient and food

monitoring abilities. With a continuous improvement in technology, Fitbit will need to continue

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to produce innovative, new products to stay up to date with the changing environment, especially

as the market grows more competitive and new competitors, like Apple Watch, enter the market.

Our fourth recommendation is that Fitbit should pursue development in other areas of the

health technology as the fad dies down. They have experience great growth thus far, but similar

to the last recommendation, innovation is key in order to beat the fad and continue success.

Lastly, our group believes that Fitbit should target cardio users in particular for new Fitbit

customers. An overwhelming majority from both research findings perceived cardio users as the

prominent group. Fitbit could also look into a high-profile cardio athlete sponsor in order to

capitalize on this association and gain new customers as well. With these recommendations,

Fitbit could become the leading company in the health wearable industry and gain a greater

customer base.

Conclusions

In conclusion, the market research findings conducted were productive and successful.

The qualitative research initially allowed us to explore the mind of the consumer and get greater

detail about their perceptions and reasons behind them. Using this information, we finalized

seven hypotheses that gave us a strong basis for quantitative analysis. By using multiple

statistical tests and comparing descriptive statistics, we were able to accept six of the seven

hypotheses. This means that our initial thoughts and qualitative findings were relatively accurate.

In putting both pieces together, we made five recommendations that Fitbit as a company should

consider based off the market research in order to succeed in the five research objectives chosen.

Should they choose to follow these, we believe Fitbit will continue to experience success and

grow as a company despite increased competition.

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Appendix A, Focus Group Guide

I. Introduction A. Recording/observers B. Casual, relaxed, informal C. No right or wrong answers D. Be honest, tell the truth E. Share your opinions F. Discussion rules

1. Talk one at a time 2. Don’t dominate the discussion 3. Talk in any order 4. Listen to others 5. Welcome to respond to others’ points in polite manner

II. General Attitudes toward Health Conscious Movement . is the world more health conscious, what trends have you noticed since then, why

III. General Attitudes toward Health Wearables . do they work, are they worth it, are they popular, fashionable, useful, advantages/disadvantages, trends

IV. Usage/Purchase of Health Wearables . who uses them? who buys them? for what purpose, competition

V. The Perfect Health Wearable . product characteristics (physical), trackers, connection to smart devices, future improvements

VI. Initial Attitudes towards FitBit . awareness, usage, have one, likes/dislikes, would you buy one, recommend one, consumer perspectives

VII. Show and Discuss FitBit Facts & Advertising . sued, reported not working, etc., Fitbit blaze

VIII. Reactions to FitBit . physical reactions, health reactions, fashion reactions, future improvements, useful, easy to use, etc.

IX. Effect on Health . does it work? buy it more if proof, do you like it, would it work for you?

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Appendix B, In-Depth Interview Guide

I. Introduction A. Casual, relaxed, informal B. A few guiding questions, but more conversation structured C. No right or wrong answers D. Be honest, tell the truth, share your opinions

II. Questions . Tell me about your health habits.

1. Do you regularly work out? 2. What kinds of healthy habits do you keep? 3. Do you track any of your health metrics, i.e. steps, heart rate, calories,

etc.? A. Think about the strength of the health conscious movement.

1. Do you think health wearables will continue to grow in popularity? 2. Would you be more likely to purchase a health wearable if the health-

conscious market continues to gain popularity? a. Why/why not?

3. What type of health wearable would you be most likely to purchase (watch, clothing, etc.)?

4. Would you be interested in buying additional products beyond wearables to monitor your health, i.e. the Fitbit scale, etc.?

B. Think about the main competitors in the health wearable industry. 1. Who gives the biggest competition, especially compared to Fitbit? 2. Would you be less likely to buy Fitbit if Apple Watch prices drop 10

percent? 3. Do you think the Fitbit Blaze is a competitor to the Apple Watch?

. Give description of Fitbit Blaze coming out C. Think about the health tracking capabilities of smartphones and other devices.

1. What are your thoughts about using a smartphone over a health wearable? 2. Would it be easier to just use your cell phone instead of having another

device? 3. Do you like that the health wearable still requires a secondary device in

order to look at the data? D. Think about the promise of increased health and performance improvements by health wearables.

1. Do you think they work? 2. Do you think that there is too much promised performance from the Fitbit

company? 3. Do you feel that you don’t use the Fitbit wristband as much as you

originally thought you would? 4. Do you feel that Fitbit was misleading after you have used your wristband

for some time now? E. Think about what would inspire you to buy a health wearable.

1. What data would you need to make the decision to buy a health wearable?

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2. Would you be more likely to buy a health wearable if there was hard data backing up the product?

3. Would you be more likely to buy one if a friend claimed it helped improve their health?

F. Think about the improvements users claim to see. 1. How do you think users want to use the wearable for their health? 2. What health metric would be important to be monitored for you to

purchase and use the product? 3. What health features for the Fitbit would encourage you to purchase and

use the product? G. Think about the health monitoring capabilities of health wearables.

1. What kind of capabilities would you like to see in a health wearable? 2. Would it be helpful for Fitbits to have added capabilities like stress

trackers and blood pressure monitors? 3. Where do you see the future for Fitbit? 4. Do you think Fitbit is just a fad, or will it continue to evolve?

H. Think about Fitbit specifically. 1. What are your overall comments, concerns, and/or approvals of Fitbit

bands? 2. Do you own one? Do you plan to in the near future? 3. Does it work? Do you like it? 4. What kinds of capabilities do you have on it?

III. Conclusion . Any last comments or suggestions to add? Anything else you would like to say about Fitbit? or health wearables?

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Appendix C, Final Questionnaire

Hello! Thank you for taking the time out to participate in this survey which is being conducted to understand the public’s perception of the health conscious movement, the function of health wearables, and the overall image of the Fitbit brand. Your responses are highly valued and will go a long way in shaping our study. Please rest assured that your identity and your responses will remain completely confidential and will only be used by authorized people for the purposes of this study. The survey contains 40 questions divided across 5 sections and should not take you more than 20 to 25 minutes to complete. Section 1 - Health Consciousness The questions in this section are related to your overall ideas about the health conscious movement and your current health habits. For the purposes of this survey, the health conscious movement is the general trend that society, as a whole, has begun to monitor daily activity, weight, food nutrients, etc. more than in the past.

1. Would you consider yourself to be health-conscious, i.e. do you monitor your food intake, watch nutrition information on food, have awareness of health information or trends, etc.?

a. LIKERT SCALE YES/NO 2. On average, how many times per week do you do a physical activity? For the purposes of this

survey, a physical activity is defined as an event you actively take part of outside of daily work, walking activities, etc. that typically lasts for at least 20 minutes or more. Examples include yoga classes, cardio, running, going for a leisure walk, intramural sports, hiking, team sports, swimming, etc.

a. SHORT TEXT NUMBER 3. Choose the option that most often applies to you:

a. I usually complete physical activities on my own. b. I usually complete physical activities with one other friend. c. I usually complete physical activities with a small group of friends. d. I usually participate in large group/class physical activities. e. I do not usually participate in physical activities.

Section 2 - Health Wearables The questions in this section are related to your overall awareness and opinions about health wearables. A health wearable is a gadget or other piece of technology that can be worn by a user to monitor and track information related to health and fitness, such as daily steps, calories burned, heart rate, etc. Some health wearables also include features including text alerts, GPS, music, time device, etc. Note that for the purposes of this survey, the only health wearables we are talking about are wristband and watch-like products.

4. Were you aware of what a health wearable is before this survey? a. Yes b. No

5. Do you currently own a health wearable? a. I own a health wearable. b. I have owned a health wearable in the past. c. I have never owned a health wearable.

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6. If you do not currently own a health wearable, how likely is it that you will buy one in the future? a. LIKERT SCALE

7. LIKERT SCALE FOR AGREE/DISAGREE - Influential factors for buying a health wearable. Please select True or False if the following reasons for owning a health wearable apply to you.

a. I am competing against my friends on social media. b. I like to monitor my daily activity levels. c. I am trying to lose weight. d. The health wearable makes me appear cool and fashionable. e. I was given the health wearable as a gift. f. I am trying to live a healthy lifestyle.

8. What most influenced or would influence your decision to purchase a health wearable? a. I am competing against my friends on social media. b. I like to monitor my daily activity levels. c. I am trying to lose weight. d. The health wearable makes me appear cool and fashionable. e. I was given the health wearable as a gift. f. I am trying to live a healthy lifestyle. g. Other: short text

9. Do you still use your health wearable every day? a. Yes b. No c. Sometimes

10. Please rank in order of preference with your top 3 features in a health wearable, with "1" being the number one most wanted feature.

a. timer b. clock c. blood pressure monitor d. heart rate monitor e. step counter f. calorie tracker g. standing-sitting time monitor h. text alerts i. alarm clock j. GPS k. calories burned l. fat and nutrient level monitoring m. floors climbed n. active minutes per day o. wireless syncing p. music control q. sleep tracking r. other: short text s. none

11. What is your general opinion about health wearables? OPEN ENDED Section 3 - Competitors The questions in this section are related to the major brands in the health wearable industry. Later questions in this section will also compare two specific brands and products.

12. Please check which of the following are applicable to you (GRID QUESTION) I am not aware of

this brand I have heard of this brand, but am not

I am familiar with this brand and their

I plan on purchasing a

I own or have owned a health

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familiar with their products

products health wearable from this brand

wearable from this brand

Apple iPhone Health App

Apple Watch

Garmin

Fitbit

Jawbone

Microsoft Band

Moov Now

Under Armor Band

Other: SHORT TEXT

For these next few questions, we will focus specifically on your preferences of the similar Apple Watch and Fitbit Blaze. Below are images of the products, as well as a short description of the features available with each.

Apple Watch Receive and respond to notifications in an instant. Track your daily activity. Control your music using only your voice. Pay for groceries just like that. With Apple Watch, important information and essential features are always just a raise of the wrist away.

o Music Control with iPhone o Calendar Alerts o Mapping & GPS o Phone Calls with your iPhone o Text Alerts and Responses o Use of Third-Party Apps o Workout App o Apple Pay o Alarm Clock

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o Watch o Daily Activity App that measures time walking, standing, and sitting o Personalized home screen o Different bands available in various metals and colors

Fitbit Blaze A fitness watch that’s as stylish as it is smart, the Fitbit Blaze is a revolutionary watch designed with fitness in mind that allows you to innovate the workout experience, has enhanced features to keep fitness in focus, and gives you the functions needed to get through your day easier.

o Heart Rate monitor o Music Control with smartphone o On-Screen Workouts & instructions o Multi-Sport monitoring for biking, running, etc. o Workout Goals & Summaries o All-Day Activity measures calories burned, steps, and actvitiy levels o 5 Day Battery Life o Sleep Tracking o Silent Alarms o Watch o Connected GPS o Call, Text, & Calendar Alerts o Personalized Bands and Home Face 13. Given the information above about the Fitbit Blaze and the Apple Watch, which one would you

be more likely to buy based on the described features? a. Apple Watch b. Fitbit Blaze

14. If you selected Apple Watch, could you briefly tell us why? OPEN ENDED 15. Suppose that the average price for an Apple Watch is between $349 and $599. Suppose that the

average price for a Fitbit Blaze is $199.95. Given the average prices of the products, which of the two health wearables would you be more likely to buy?

a. Apple Watch b. Fitbit Blaze

16. If the Apple Watch and the Fitbit Blaze had the exact same features and the exact same price, which would you be more likely to buy?

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a. Apple Watch b. Fitbit Blaze c. Do not have a preference

Section 4 - Fitbit Brand Awareness The questions in this section are related to your overall awareness and opinions about the Fitbit brand. Please express your honest opinions and choose the best option that applies specifically to your thoughts.

17. Please check all that apply to you: a. I am not familiar with Fitbit b. I have heard of Fitbit before c. I have a friend or family member that owns a Fitbit product d. I own a Fitbit product

18. Do you think the average user of a Fitbit is most likely to be at a workout level of: a. Beginner – just getting started with workouts and physical activities b. Intermediate – works out on a somewhat consistent basis and is familiar with the basics

of workout, but not a comprehensive knowledge c. Advanced – works out regularly on a weekly basis with rigorous routines and has a

detailed knowledge of different workouts, etc. 19. Do you think the average user of a Fitbit is most likely to be a cardio person or weight lifting

person? a. Cardio b. Weight lifting c. Neither

20. If Fitbit added built-in functions for its products that included dietary and nutrient level monitoring, how would it affect the likelihood of you purchasing a Fitbit?

a. LIKERT SCALE VERY LIKELY/UNLIKELY 21. How accurate do you think Fitbit monitoring is for features like calories burned, heart rate

monitoring, steps, etc.? a. Very accurate b. Mostly accurate c. Somewhat accurate d. Slightly accurate e. Not accurate at all

22. Suppose that a reputable third party research organization releases a verified report with scientific evidence that suggests Fitbit products have a positive outcome on user health. Please rank how this would affect the likelihood of buying a Fitbit:

a. Likert scale with ends Definitely will purchase and Definitely will NOT purchase, middle at No influence

23. Do you currently own or have you owned in the past a Fitbit band product? a. Yes, currently own b. Yes, owned in past c. No – skip to section 6 demographics

Section 5 - Fitbit Specifics The questions in this section are related to you, as a Fitbit owner, and what your experience has been with the product and brand. We appreciate your honest opinions and your time is incredibly useful to us.

24. What kind of Fitbit band do you own? a. Alta b. Blaze c. Charge HR

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d. Flex e. One f. Surge g. Zip h. Other: short text

25. What do you like about it? OPEN ENDED 26. What do you not like about it? OPEN ENDED 27. In what year did you receive your first Fitbit? Please estimate to the best of your abilities if you

do not remember exactly. SHORT TEXT WITH DATE FORMAT 28. Do you utilize the Friend Tab on the Fitbit app?

a. Yes b. No c. Not aware of it

29. LIKERT SCALE FOR EACH ITEM Please select true or false for the following possible reasons about why you use your Fitbit.

a. I am competing against my friends on the Friend Tab. b. I like to monitor my daily activity levels. c. I am trying to lose weight. d. The Fitbit makes me appear cool and fashionable. e. I was given the Fitbit as a gift. f. I am trying to live a healthy lifestyle.

30. How much does owning a Fitbit influence your motivation to be active? a. Likert scale – with 1 No influence to 5 Sole Motivation to be active

31. What physical activity do you feel that your Fitbit is the most useful for in monitoring? a. Cardio (Running, walking, biking, swimming, etc.) b. Weight Training/Lifting c. Yoga/Meditation d. Contact sports (rugby, football, etc.) e. Team sports (volleyball, baseball, soccer, etc.) f. Individual sports (swimming, track, etc.) g. Other: short text

32. LIKERT SCALE COMPLETELY AGREE/DISAGREE Please select True or False according to your personal habits after owning a Fitbit.

a. I am more active than before. b. I monitor my daily activity levels more often than before. c. I live a healthier lifestyle than before. d. My health habits have not changed.

Section 6 – Demographics The final section contains a series of demographic questions for classification purposes only. Please remember that all of your responses are completely confidential and anonymous, and will not affect the usage of your data in our survey. We thank you again for your time and appreciate your responses!

33. Are you: a. Male b. Female c. Other

34. How old are you currently, in years? SHORT TEXT 35. What is the highest level of education you have completed?

a. Some high school b. High school or GED c. Some college

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d. Trade college e. 2 year or Associate’s Degree f. Bachelor’s Degree or 4 year program g. Some postgraduate work h. Post Graduate Degree

36. Are you currently enrolled in a college or university? a. Yes – at the University of Nebraska-Lincoln b. Yes – at another university c. No d. Graduated within the last calendar year from the University of Nebraska-Lincoln e. Graduated within the last calendar year from the another university

37. What state do you currently live in? Please write out the full name of the state. SHORT TEXT 38. Which of the following best describes your current employment status?

a. Employed part-time b. Employed full-time c. Self-employed d. Unemployed

39. What race do you consider yourself to be? Check all that apply. a. White or Caucasian b. Hispanic or Latino c. Black or African American d. Native American or American Indian e. Asian / Pacific Islander f. Other

40. What is your marital status? a. Single, never married b. Married or domestic partnership c. Widowed d. Divorced e. Separated

Thank you for your time in completing our survey. We truly appreciate your help!

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Appendix D, Statistical Tests

Figure 1

Figure 2.1

Figure 2.2

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Figure 3

Figure 4

Figure 5

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Figure 6.1

Figure 6.2

Figure 7

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Works Cited

FitBit. About Us. 2016. <https://www.fitbit.com/about>.

PwC Health Research Institute. "Health Wearables: Early Days." 2014. New Health Economy. Report. 25

January 2016.

Taylor, Harriet. From geek to chic: Wearables meet fashion at CES. CNBC, 8 January 2016. Web.