Formal Business Report

SEIKO EPSON CORPORATION ANALYSIS REPORT:

PULSENSE PS-100 BAND

Prepared for:

Michael McDougal

Chief Executive Officer of Sales and Marketing

Seiko Epson Corporation

Prepared by:

Megan Habershaw

Director of Sales and Marketing

Seiko Epson Corporation

December 4, 2015

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EXECUTIVE SUMMARY

Seiko Epson Corporation was established in 1942. Originally known for business

technology manufacturing, Seiko Epson Corporation created a new product the Pulsense

PS-100 Band. With the fitness band industry growing and consumer satisfaction at a

high, Seiko Epson Corporation’s Pulsense PS-100 band could provide customers with the

utmost satisfaction meanwhile maximizing profit.

FITNESS BAND INDUSTRY

The fitness band industry has expanded over the years with Americans joining

health clubs as well as weight loss companies. With the expansion of the industry, sales

are expected to grow throughout the coming fiscal years. Fitness enthusiasts in certain

age groups are being targeted in order to expand sales.

EPSON’S TWO COMPETITORS

The fitness band industry is very competitive. Two of Seiko Epson Corporations

major competitors include the Jawbone UP4 and the Fitbit Flex. Both competitors have

positive and negative characteristics.

EPSON’S PULSENSE PS-100 BAND

The Pulsense PS-100 Band is the first product Seiko Epson Corporation has

produced. It is a stable product with both positive and negative characteristics. In

comparison to Seiko Epson Corporations two competitors, the Pulsense PS-100 stands

out.

FINDINGS

Although the fitness band industry is increasing and consumer satisfaction at a

high, the Pulsense PS-100 Band could not provide customers with the utmost satisfaction

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while expanding Seiko Epson Corporations earnings. After investigating the fitness band

industry, it has been found that it is lucrative but competitive. Seiko Epson Corporation

must push back the production of this product to early November 2016 in order to focus

on customer satisfaction.

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Memo of Transmittal

To: Michael McDougal, Chief Executive Officer of Sales and MarketingFrom: Megan Habershaw, Director of Sales and MarketingDate: December 4, 2015Subject: Seiko Epson Corporation Analysis Report: Pulsense PS-100 Band

Dear Mr. McDougal, Chief Executive Officer of Sales and Marketing,

In response to your request on January 21, 2015, I have enclosed an analysis of

the potential new product Pulsense PS-100 Band. This document provides an

examination of the fitness band industry, Epson’s two major competitors, and our

product. Please pay close attention to our competitors.

If you may have any questions please contact me on my work phone at 401-234-

2233 EXT: 456 or my personal cell phone 401-675-9344. This analysis has been

completed within the date needed and will need to be distributed to the Board of

Directors by December 10, 2015. Thank you for taking the time to read this and I hope to

discuss this with you as soon as possible.

****************************

I. INTRODUCTION

All around the world people are focusing on health and fitness. It is an industry

that is expanding with new methods sprouting. Technology has helped the health and

fitness industry develop into a multi-billion-dollar corporation spread through thousands

of businesses. Here, the fitness band industry will be looked at along with two of Seiko

Epson Corporations competitors. Seiko Epson Corporations Pulsense PS-100 Band will

be discussed along with major conclusions and recommendations to follow.

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Purpose

With the fitness band industry growing and consumer satisfaction at a high, Seiko

Epson Corporation’s Pulsense PS-100 band could provide customers with the utmost

satisfaction meanwhile maximizing profit.

Company History

Seiko Epson Corporation is a multi cultural company that has been around since

1942 when it was first established in Nagano, Japan. Epson is known for the printer,

creating the first in 1968. Primarily a Japanese manufacturing company for electronics,

Epson has headquarters all around the world with a total of 73,171 employees in the last

fiscal year. With a focus in information related equipment, devices and precision

products, sensing and industrial solutions, and other business products, Epson’s gross

profit of 2014 was 362,589 millions of yen. (Corporation, Seiko Epson)

Sources

From January 21, 2015 to August 1, 2015, Seiko Epson Corporation has been

studying the Pulsense PS-100 Band. The research has been conducted in the Plymouth

State University Library in Plymouth, New Hampshire. Researchers used electronically

based articles as resources.

II. FITNESS BAND INDUSTRY

The market for fitness bands has expanded over the past five years. In America,

over 72 million people are considered to be clinically obese. Due to the increase in

unhealthy behaviors, 41 million Americans joined health clubs. These health clubs

include corporations such as Planet Fitness, Anytime Fitness, and the YMCA. To become

healthy, Americans are joining weight loss companies in which have combined an annual

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revenue of $2 billion. With the market of people joining gyms and weight loss

companies, more people are expanding ways to become healthy. (Help, Franchise)

The fitness band industry has grown since 2010. According to Parks Associates, a

market research and consulting company, it is estimated that the global revenues from

connected fitness trackers will increase from over $2 billion in 2014 to $5.4 billion by

2019, (Associates, Parks). Parks Associates also found that connected health devices in

households increased from 24% at the beginning of 2013 to 30% at the end of 2014

(Associates, Parks). With a 25% increase in household sales, fitness bands will continue

to increase in global units shipped annually, (See Appendix A).

In order to maximize profit, fitness enthusiasts whom are seeking health and

fitness guides must be targeted. More specifically, 55% of those that buy fitness trackers

are females. According to the NPD Connected Intelligence Consumer and Wearables

Report, adults between the ages of 35-54 are more likely to buy a fitness band. It has also

been found that people with an average household income of $100,000 or more are likely

to buy this product, (See Appendix B). This suggests that adults whom are financially

stable should be targeted.

III. SEIKO EPSON CORPORATION COMPETITORS

The fitness band industry has a lot of competition. Two of Seiko Epson

Corporations Pulsense PS-100 major competitors are the Jawbone UP4 and the Fitbit

Flex. Competitors allow the company to evaluate the product’s value in order to

maximize profit and provide customer satisfaction.

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Competitor A: Jawbone UP4

The Jawbone UP4 is one competitor of the Pulsense PS-100. Both positive and

negative characteristics will be discussed.

Positive Characteristics

*Tracks all stages of sleep including wake, REM, light, and deep.

*Alerts when the customer has reached proper activity and sleep levels.

*Different LED light distinguishing sleep, activity, and notifications

Negative Characteristics

*Price is $199.99.

*Limited color options of black and silver. (See Appendix C)

*Continuously updating system.

For fitness band customers, the Jawbone UP4 is a good product. While it does

track all stages of sleep and alerts for when the customer has reached proper levels, the

product is expensive and has limited options of color.

Competitor B: Fitbit Flex

Seiko Epson Corporations biggest competitor is the Fitbit Flex. Some positive and

negatives of the Fitbit Flex will be discussed.


*Price is $99.95.

*Adequate color options of 10 different colors. (See Appendix D).

*Able to use device at an altitude of 30,000 ft. and in -4-113 Fo.


*Defined size options of only small and large.

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*Only tracks 7 days of data.

*The style is slim and tight.

The Fitbit Flex has a very good price and provides customers with many different

color options however it is slim and tight with no variety in size options to comply with

consumer satisfaction. This product has an option of using the product in high altitudes

and various temperatures but is limited in data capacity.

IV. SEIKO EPSON CORPORATION’S PULSENSE PS-100 BAND

Seiko Epson Corporation’s potential new product is the Pulsense PS-100 Band.

Important positives and negatives have been selected as follows.


*It is recyclable and eco-friendly.

*Satisfactory data storage of up to 20 days.

*Distinguishes LED light for 3 fat burning zones.


*Particular price of $129.99

*Product is not waterproof

*Restrained battery life of 3 days.

The Pulsense PS-100 Band is made with recyclable material and is economically

friendly. Although it has a low battery life, its sufficient storage capacity creates

customer gratification. The Pulsense PS-100 Band has a steep price, but provides

customers with luxuries such as the distinguishing LED lights for different fat burning

zones.

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Comparative Analysis

In order to compare Seiko Epson Corporation’s Pulsense PS-100 Band with its

two major competitors, a Comparative Analysis was completed. It explains major

similarities and differences within the three products the Pulsense PS-100 Band, Jawbone

UP4, and Fitbit Flex.

Comparative Analysis of Seiko Epson Corporation

And Two Competitors

The Pulsense PS-100 Band, the Jawbone UP4, and the Fitbit Flex each connect to

a phone or a computer in order for customers to track progress. The Pulsense PS-100

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Data from: Fitbit. "Fitbit Flex." Www.fitbit.com. N.p., n.d. Web. Aug.-Sept. 2015. <https://www.fitbit.com/flex#specs>. and Jawbone. "UP4 by Jawbone | A Fitness Tracker so Advanced It Pays."Jawbone.com. N.p., n.d. Web. Aug.-Sept. 2015. <https://jawbone.com/store/buy/up4>.

Band is the only product that has a variety in product size. Seiko Epson Corporation’s

product has a price enclosed by its competitors.

Although the Pulsense PS-100 Band has a variety in product size and a

competitive price, the competitors stand out in battery life, alerts, color choice, and the

ability of waterproof. The Fitbit Flex has a lower price along with more color options and

data storage. Unlike its competitors, the Pulsense PS-100 Band is not waterproof and

does not have any sleep alerts while tracking the consumers sleeping patterns.

V. FINDINGS

Although the fitness band industry is increasing and consumer satisfaction at a

high, the Pulsense PS-100 Band could not provide customers with the utmost satisfaction

while expanding Seiko Epson Corporations earning.

Conclusions

Major Conclusion: After investigating the fitness band industry, it has been found that it

is lucrative but competitive.

The fitness band industry is projected to expand its overall revenue to $5.4 billion

by 2019.

Seiko Epson Corporation is primarily a company that sells technology for

business rather than pleasure.

Seiko Epson Corporation must target consumers whom are financially stable in

order to make a profit.

Fitbit Inc. has mastered the fitness band industry with profit earning products.

The Fitbit Flex is the top competitor for the Pulsense PS-100 band.

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The Pulsense PS-100 band stands out in the storage of data and the ability to be

eco-friendly.

Recommendations

Major Recommendation: Seiko Epson Corporation must push back the production of this

product to early November 2016 meanwhile focusing on customer satisfaction.

The Pulsense PS-100 Band must have an expanded color option. This will provide

consumers with more than one choice and increase satisfaction.

Seiko Epson Corporation needs to increase the battery life of the product up to 7

days. A higher battery life suits the buyer’s everyday life thus increasing profit.

Seiko Epson Corporation should create partnerships with health and fitness clubs

as well as weight loss companies. By doing so, breaking into the fitness band industry

will be easier and consumers are more likely to trust this product.

Along with sponsorships from companies, a celebrity endorsement is a must. A

celebrity endorsement, specifically a fitness trainer, will provide a familiar face to

customers increasing the ability to market the product.

The Pulsense PS-100 Band needs to capitalize on the ability to be used in high

altitudes and various temperatures. This marketing strategy will expand our target market

increasing sales from a variety of consumers.

The marketing team also has to take advantage of the use of recyclable direct

materials in order to cater to the worlds evolving environment.

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APPENDICES

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Appendix A: Unit Shipments

Visual From: Danova, Tony. "Smart Watches And Fitness Bands – Here's Why The Wrist Will Be The Next Frontier For Computers." Business Insider. Business Insider, Inc, 25 Jan. 2014. Web. Aug.-Sept. 2015. <http://www.businessinsider.com/smart-watch-and-fitness-band-sales-2014-1>.

Appendix B: Demographics

Visual From: Group, NPD. "The Demographic Divide: Fitness Trackers and Smartwatches Attracting Very Different Segments of the Market, According to The NPD Group." NPD Group. NPD Group, 06 Jan. 2015. Web. Apr. 2015. <https://www.npd.com/wps/portal/npd/us/news/press-releases/2015/the-demographic-divide-fitness-trackers-and-smartwatches-attracting-very-different-segments-of-the-market-according-to-the-npd-group/>.

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http://static1.businessinsider.com/image/527aa984ecad04931d5cceb2-960/wearableunitsforecast.png

Appendix C: Jawbone UP4

Visual From: Jawbone. "UP4 by Jawbone | A Fitness Tracker so Advanced It Pays."Jawbone.com. N.p., n.d. Web. Aug.-Sept. 2015. <https://jawbone.com/store/buy/up4>.

Appendix D: Fitbit Flex

Visual From: Fitbit. "Fitbit Flex." Www.fitbit.com. N.p., n.d. Web. Aug.-Sept. 2015. <https://www.fitbit.com/flex#specs>.

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SOURCES CITEDAssociates, Parks. "Parks Associates: Global Revenues From Connected Fitness Trackers

to Exceed $5 Billion by 2019." Marketwire. MarketWire, 25 Mar. 2015. Web.

May-June 2015. <http://www.marketwired.com/press-release/parks-associates-

global-revenues-from-connected-fitness-trackers-exceed-5-billion-2019-

2003533.htm>.

Corporation, Seiko Epson. "Annual Report." (n.d.): n. pag. F. Mar.-Apr. 2014-2015.

Web. 1 Dec. 2015.

Corporation, Seiko Epson. "Epson Printers, Scanners, Projectors, Robotics, Point of Sale,

and More." Epson Home Page. N.p., n.d. Web. 01 Dec. 2015.

Danova, Tony. "Smart Watches And Fitness Bands – Here's Why The Wrist Will Be The

Next Frontier For Computers." Business Insider. Business Insider, Inc, 25 Jan.

2014. Web. Aug.-Sept. 2015. <http://www.businessinsider.com/smart-watch-and-

fitness-band-sales-2014-1>.

Fitbit. "Fitbit Flex." Www.fitbit.com. N.p., n.d. Web. Aug.-Sept. 2015.

<https://www.fitbit.com/flex#specs>.

Group, NPD. "The Demographic Divide: Fitness Trackers and Smartwatches Attracting

Very Different Segments of the Market, According to The NPD Group." NPD

Group. NPD Group, 06 Jan. 2015. Web. Apr. 2015.

<https://www.npd.com/wps/portal/npd/us/news/press-releases/2015/the-

demographic-divide-fitness-trackers-and-smartwatches-attracting-very-different-

segments-of-the-market-according-to-the-npd-group/>.

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Help, Franchise. "Fitness Industry Analysis 2015 - Cost & Trends." Fitness Industry

Analysis 2015 - Cost & Trends. N.p., n.d. Web. 02 Dec. 2015.

<https://www.franchisehelp.com/industry-reports/fitness-industry-report/>.

Jawbone. "UP4 by Jawbone | A Fitness Tracker so Advanced It Pays."Jawbone.com.

N.p., n.d. Web. Aug.-Sept. 2015. <https://jawbone.com/store/buy/up4>.

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