Final Presentation#3

An analysis and recommendations for Weight Watchers China to increase market share and brand awareness in the city of Shanghai.

Lose weight – gain confidence

Made by Team#5 -Ester Friesen, Martin Krivka, Daniel Dakessian, Alexandre De Smet and Sheikh Ali – as a part of Action Project at HULT International Business School, Shanghai

Mega trends Competitors Market Consumer Connect it Field of Play Snapshot

The Team

Ester Friesen

“I´m a Globetrotter and loves exploring new cuisines”

Germany Business Development

Alexander De Smet

”我爱中国的文化”

Belgium Business Administration

Daniel Dakessian

“I have eaten a 2,5kg hamburger”

USA International Business

Sheikh Ali

“The point-thing really works”

Norway Hospitality Management

Martin Křivka

“Learning Chinese is like losing weight - you can try it, but you need support”

Czech Republic Economics

Ester Friesen, Sheikh Ali, Daniel Dakessian, Martin Křivka and Alexandre De Smet

Agenda

q The Team!

q Weight Watcher´s challenge!

q Mega trends!

q Where is the market going?!

q Competitor landscape?!

q Consumer – who are they?!

q Connect it!!

q Fields of play!



4 Ester Friesen, Sheikh Ali, Daniel Dakessian, Martin Křivka and Alexandre De Smet

Political!


Weight Watcher members have lost a total of 40 000 kg – we believe more can be lost

Our Challenge!

Given the current competencies, resources

and mission of Weight Watchers, develop an

online go-to-market strategy that can triple the

current brand awareness in Shanghai and gradually

increase market share and brand awareness across

China over the next three years!

Science! Health! Validity! Sustainability!

Weight Watcher´s Mission!

“Help people lose weight in a sustainable way by helping them adopting a healthier lifestyle and a healthier relationship with food and activities. Weight loss success is at the heart of everything we do.”

China´s health care system is a “Ticking Bomb” – how can Weight Watchers be a part of the solution?

q  The health care system is underdeveloped and is failing to meet the growing need of the Chinese population

q  Government’s spending on the health care system will reach $1 Trillion by 2020

q  Nutrition and health-food industry is one of the primary focus in the five year plan


Political!


http://www.genengnews.com/gen-news-highlights/lilly-sets-up-shanghai-diabetes-center-to-develop-therapies-for-chinese-patients/81244166/

Success depends on a firms ability to understand the changing complexities of the consumer economy

q  The five year plan is driving the economy to be consumption-driven

q  A rise in disposable income is empowering the middle-class in China

q  The Chinese consumer is spending more – inflation, low interest-rate and trade-up are important indicators of this


Economical!


http://www.europam.org/chinas-dependency-of-the-world-economy/

“We should enhance people´s ability to consume, and boost their desire to consume”!

"Former Premier Wen Jiabao!

The Chinese waistlines are rapidly increasing, making China the biggest potential weight-loss market in the world

q  Standards of living are improving

q  The diabetes-level amongst children are almost four times higher than U.S.

q  The rate of urbanization is growing – adding 400 million more people in the urban areas in the coming decade

q  Lack of exercise and sedentary leisure time is one of the factors behind the weight-problem


Social!


http://medicmagic.net/wp-content/uploads/2012/10/Waist-Circumference.jpg

Number of e-customers will rise from 190- to 351Million in 2016. A strong online-presence is crucial for Weight Watcher´s success

q  China has 513 million Internet users, the largest online population in the world,

q  New methods to loose weight are coming on the market: wireless sensors to monitor overweight, ultrasounds, radiofrequencies, cryolipolsis.

q  E-spending has increased from $194bn in 2012 to $265bn in 2013

q  China will be the world’s top e-commerce market by this year


Technological!


China has 513 million Internet users, the largest online population in the world, and 164 million online

In 2012 consumer spending: $194bn

In 2013:$265bn: tendency is going to increase strongly

242m people (48% female and 52% male) shop using the internet in China

12% of purchases were from mobile phones

Top of the list for what Chinese shoppers is apparel and accessories at 68%.

E-commerce market size for WW $1,246Bn in 2012

https://m360.iowabar.org/event.aspx?eventID=37302&instance=0


Technological!


q  The rate of people with overweight/obesity has risen from 25% in 2004 to 38% in 2013 q  50% of these are centralized

in urban areas.

q  Shanghai is showing similar numbers – suggesting that nearly 8 million people can be categorized as overweight/obese

q  A factor to understand future tendencies is to look at child obesity rate. Child obesity rate is increasing: (in 1985 the rate was 0,2% compared to 8,1% in 2013, <18 years)

The growing prevalence of overweight/obese individuals in China is fuelling demand for effective weight loss methods

Market!


Technological!


The trend has shifted from simple guidance to scientific methods to a more comprehensive support program

Market!

”I know what to do, I know how it works, but I cannot do it alone!”

Kay Jingyee Liao 33

Age of guidance - Diet methods based on professional and detailed manuals and guidelines

Age of Science - Diet programs are based on scientific methods

Age of motivation and trust - Marketing uses celebrity-endorsement to instill trust

- Gifts and merchandising – rewarding system

- Apps and online based technologies


Technological!


Boohee and Xtravaganza presents the biggest threat The Competitive Landscape!

Weight Management Solutions

✔ ✔ ✔ ✔

Personalized Approach ✔ ✔ ✔ Online Support ✔ ✔ Face to Face Support

✔ ✔ ✔ Tangible Product ✔ ✔ ✔ Convenient ✔ ✔ Simple ✔ ✔ ✔ Educational ✔ ✔ ✔


Technological!


Weight loss ideology is part of a broad modern pop culture, and it needs to attract dieters via a multichannel approach

The Competitive Landscape!

¤  Apps - Samsung is the biggest vendor of smartphones in China. All new Samsung cell phones have an integrated weight management app

¤  Food and beverages – The food-segment is the biggest segment in the weight management industry, and the beverages is the fastest-growing segment

¤  Fitness and Gyms - The industry is in crisis in China, and western chains are exiting the market. Many Chinese answered that they rather go to a park than go to a gym.

¤  Traditional Medicine –SPA, Wellness and traditional medicine – Within urban areas the use of spas for weight management is gaining popularity. Herbs and diet dishes are still the most popular methods to loose weight in China

¤  Slimming centers – The use of slimming centers is gaining popularity due to its “quick solution” for weight management

¤  Others – Magazines, books, online forums

Xin Lin, 28 years old, wants to loose weight without giving up her enjoyment for food



A mini-biography! Xin Lin is a busy woman who is pursuing her career. This gives her less time to cook at home, and usually she will buy her breakfast and lunch – and rather spent time cooking dinner. Xin Lin expresses her whish to be thinner, as it will suit her lifestyle much better. A balanced and healthy lifestyle will increase her self-confidence, make her wear clothes she wants to and most importantly she will look beautiful. However, this weight-loss cannot be on the expense of her social life and enjoyment of delicious food! Social life and family are important for her, and their opinions matters. When deciding on Weight Loss Management company she used internet, blogs and recommendations before she ended up at Weight Watchers. An important factor was the support from others.

Key Characteristics Comfort with Buying Research Final Choice

Low High Internet Referrals Brand Value

A Typical Weight Watcher Customer !

Xin Lin is moving towards the group of “New Mainstream Consumers”



How many? - 400 Million consumers will be a part of this group by 2020 - Will become the majority in Urban areas

Key characteristics -  More individualistic – wants services to appeal to her individualism -  More self-indulgent – wants services to help her achieve this -  More open for brand-loyalty – If a brand increases her individualism, she

will stick to that brand -  First to try new products and services – they are the trend-setters -  Higher income – allows them to seek new services and experiences -  More focus on technology – 700 million will have access to internet by

2017. This combined with importance of information-seeking emphasize the importance the online aspect will play in the future



No problem in buying, but does it appeal to her individualism?

Referrals are still important, but online search will increase its importance

Open for brand loyalty – it has to appeal on an emotional level

How can Weight Watcher meet these trends to achieve a desirable position in the market?



Online-platform

Meeting Products

Strengthening the 360´ experience by adopting new capabilities!

Valuable Assets -  Community -  Holistic

approach -  Directed e-

marketing

Strategic Assets -  A scientific-

based approach -  Expertise/

Knowledge -  Intangible skills

Entry Assets - Location

Asymmetric Assets - Online Platform

Multi-tiered Pricing Strategy: Offer your product through various pricing to reach out to a greater share of the market


Mega trends Competitors Market Consumer Connect it Field of Play 1 Snapshot

Field of Play 1!

How?!By introducing a three-tiered pricing strategy - Freemium, Membership and VIP-membership. Weight Watchers can satisfy several segments based on their preference, while simultaneously building up a stronger database of potential members.

Users will sign up for free and have limited access to online content

Users will sign up and get this service: Meetings + Full Online Access

Users will sign up and get this service: Meeting + Full Online Access + “Mentor”

How does this enhance your current business model?



Field of Play 1!

Value chain ¤  This model allows you to build of your strengths, and offer a limited access to a wider base – without compromising your business model

Market segment ¤  The business model will allow you to attract a wider base via an online

presence that will provide a more personalized weight loss experience

Potential business model ¤  The model will create multiple revenue-streams by converting freemium to

legitimate full-paying members

Risks ¤  Members will not find membership valuable enough (stay on limited

platform) ¤  The market will not be attracted to such a limited platform

Produc'on

Offering

✔

Delivery

Market

Partnership

Pricing Model ✔

To become an industry-leader it is paramount for Weight Watchers to attract a rapidly growing online segment



Field of Play 2!

Social Community Aspect // customers will be interacting with each other through multiple mediums

Gaming Aspect // Customer will be virtually rewarded by completing different weight losing activity.

Educational Aspect // Users will receive guidance and assistance for a healthy lifestyle

Anonymity // The platform provides a possibility for customers to gather in groups, share ideas and experiences, have a social online life, while staying anonymous

Brief Description // Consumers creates a virtual friend/avatar (8 animals in choice). This avatar will be customer’s guide through the program. The avatar will be with them everywhere (web, app, Wechat). Users will have the possibility to create a friendship with other avatars and create small teams of maximum 8 members (creating the forest). A rewarding system will allow users to customize their avatar and forest.

How?!Develop a unique online based platform that aligns with Chinese consumers specific taste and habits. A customised approach with a tailored experience that guides you through your weight loss journey.

Why?!

An Example!




Field of Play 2!

Value chain ¤  This model will require an additional competency acquired through a partnership to serve a bigger market than you currently are able to by offering a new approach to manage your weight.

Market segment ¤  People between age of 18 to 38. People who are seeking weight

management help. People who are interested in exercise online assistant.

Potential business model ¤  In app purchases, download revenue, advertising revenue.

Risks ¤  Competition will develop this platform before Weight Watchers. ¤  The market will not be attracted to this concept.

Produc'on

Offering

✔

Delivery

Market

✔

Partnership ✔

Pricing Model

19

How can Weight Watchers penetrate the targeted segment during their initial need of loosing weight?



Field of Play 3!

How?!Targeted marketing coupled with tailored occasion-based packages will give the consumer an easy way to enter Weight Watchers for a short-term period.




Field of Play 3!

Value Chain ¤  This model will require a new way to to offer and deliver your key competencies focused on specific occasions.

Market segment

¤  The potential market is people that have BMI of > 24 (est. 8 million)

Potential business model

¤  Revenue from targeted packages.

Risks

¤  Easy to copy and emulate

¤  Potential partners may not be interested

Produc'on

Offering

✔

Delivery

✔

Market

Partnership

Pricing Model ✔

Our Recommendation



Best fit

“Based on our analysis of your strengths, market opportunities and the consumer trends we recommend moving forward with Field of Play 3”!

-  It aligns with consumers expectations -  Can be implemented easily -  We are positioning the brand at the moment

consumers thinks of loosing weight -  An increase in sales is expected

Thank you! Questions?


Bibliography

Appendix Bibliography


Jeffrey, Beg. (2012). Accenture. Meet the new Chinese consumer

Retrieved on 4/07/2013 from http://www.accenture.com/us-en/outlook/Pages/outlook-journal-2013-meet-the-new-chinese-customer.aspx

McKinsey& Company( 2013). China’s next chapter: The rise of the Generation- 2- consumer. Retrieved 4/07/2013 from http://www.mckinsey.com/insights/consumer_and_retail/chinas_next_chapter_the_rise_of_the_generation_2_consumer

Wang, H. ( 2012). Five New Trends of Chinese Consumers. Retrieved 8/07/2013 from http://www.forbes.com/sites/helenwang/2012/12/17/five-new-trends-of-chinese-consumers/2/

Epsilon. (2013). 2013 Consumer Loyalty Study- China. Retrieved 11/07/2013 from http://www.epsilon.com/apac/download/rise-stylish-chinese-consumers-trust-key-build-loyalty

Euromonitor.(2012). Weight management report in China. Retrieved 15/07/2013 from http://www.euromonitor.com/weight-management-in-china/report

The China Observer, ( 2012). Different Values for different generations of chinese consumers. Retrieved 14/07/2013 from http://thechinaobserver.com/2012/01/26/chinese-consumer-values-youth-marketing/

Links


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Links Continued


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Appendix Additional information to support our research



5

1

1 5

Typ

e o

f Ma

rke

t

Type of Offering

Very Different

Very Same

Very Different Very Same

Weight Watcher´s competitive map



The Motivational process of Weight Management Systems

Firs

t 5

we

eks

First Period Good food/ Many people mentioned that food during diet was actually good and it was surprising for them // TRUST Supportive environment / Family and Friends need constantly support and help dieters // SUPPORT Members can fit few older clothes again // MOTIVATION

Fro

m 6

th w

ee

k to

5 m

on

ths

Mid-Term Period Goal achieving – 10 kilos, 20 kilos // MOTIVATION Rewarding system // MOTVIATION People starts noticing that person is loosing weight // MOTIVATION

5th m

oth

an

d la

ter

Late Period External assistance is crucial after ending of a program to maintain desired weight// SUPPORT AND MOTIVATION



Consumers!


50%

55%

60%

Convenience Comfort Information

Factors influencing purchase

Success factors


1. Word Cloud !containing characteristics of consumer trends

2. Success factors!The most important factors influencing final purchase decision

Consumer - Characteristics!


Values and lifestyle §  Practical benefits triumphs brand

preference §  Busy schedule §  Carrier is important §  Quality is an important feature §  Value for money

-  Social media is important -  Voice rather than messages and emails -  Not afraid of talking about weight -  Seeks information and recommendations

from others

§  Don’t accept scandals from foreign brand

§  40% read product review §  Increasing income allows a trade-up §  8% spends more to try new products

Brand relations

Communication




Customers – Buying Criteria!


Buying Criteria

Score

Nice to have

Must Have Differentiation

Recognition (social)

X

Convenience X

Service (Expertise)

X X

(Online) X Tangible X Price X X Credibility X Brand Equity X

Score

Nice to have

Must Have

Differentiation

X

X X

X X

X X

X X

X

X

X

1.  Buying Criteria!The trends are showing a shift in consumer spending behaviour


Final Presentation#3

Documents

Transcript of Final Presentation#3