Why fitness trackers will stay on people's wrists Hollywood stars like Gwyneth Paltrow and Kristen Stewart made fitness trackers hip several years ago by donning them in public. However, wearable devices are now being challenged by smartwatches such as the Apple Watch. The fitness tracker market is still in the pink of health, market watchers and vendors say. These wearables remain relevant because of their lower prices, lighter weight and longer battery life, commented by market research analyst, Jonathan Collins. Fitness trackers use sensors like accelerometers and gyroscopes to track steps, count calories burned and monitor sleep patterns. Newer ones also sport heart rate sensors. The price advantages of fitness trackers was apparent as smartwatches, such as Apple Watch and LG G Watch R, have starting prices around $400 to $1,000, while a Xiaomi MiBand costs just $19.99. Even high-end fitness trackers like the Fitbit Charge HR fall in a significantly lower price bracket between $100 to $300 compared to smartwatches. "Fitness trackers need to fit seamlessly into people's daily lives and so we have designed a range of devices that span multiple styles and price points from $88 to $368," said Fitbit general manager, Steve Morley. In Singapore, sales of fitness trackers have been rising steadily, said technology research firm GfK Asia. In the period from July to Sep 2015, the market rose by 22% compared with the previous quarter. "Current trends point to a growing market as the fitness tracker is still considered a new product," said its director, Mr Gerald Tan. Local tech retailer Challenger has sold 65% more units of fitness trackers so far this year, compared to a year ago. Other retailers like Courts and Harvey Norman also reported significant increases. For some users, the chic design of some fitness trackers is a big draw and users like Rebecca Koh said she wears her Jawbone Up2 because it looks like an accessory.

Question (a) Apply the buying decision process concept to demonstrate how a consumer will pass through the first (3) steps of the process when making a decision to purchase a fitness tracker. (9 marks)

(b) Propose two (2) product differentiation strategies that leading companies in the sector like Fitbit or Jawbone may adopt, or have adopted, to make their products stand out from the competition. (8 marks)

(c) Discuss Fitbit's current pricing decision by describing one (1) pricing objective and one (1) pricing method that it could have used. (8 marks)

(d) One of the channel design decisions involves the determination of the number of intermediaries to use when distributing a company's products. Discuss Fitbit's distribution strategy as described in the article. (5 marks)