Weight Loss Programs Lauren Glasky, Nicole Nava, Ben Wainberg.
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Transcript of Weight Loss Programs Lauren Glasky, Nicole Nava, Ben Wainberg.
Weight Loss ProgramsWeight Loss ProgramsLauren Glasky, Nicole Nava, Ben Wainberg
AgendaAgenda
Industry OverviewMajor PlayersPrimary Advertising MethodsRaw Data AnalysisRecommendations
Why Weight Loss Program Industry?Why Weight Loss Program Industry?
Growing industry because:
Industry OverviewIndustry Overview
Industry Overview - DefinitionIndustry Overview - Definition Multi-billion dollar industry
Provide nonmedical services to clients to assist them in losing weight or maintaining a desired weight.
Services typically include individual or group counseling; menu and exercise planning; and weight and body measurement monitoring.
Industry operators may also sell food supplements and other weight reduction products.
This industry does not include fitness centers, health resorts and spas or medical or surgical weight reduction services.
Industry Overview - ActivitiesIndustry Overview - Activities
Who are the main competitors?Who are the main competitors?
Industry Overview & StructureIndustry Overview & Structure
HHI = 1,915.74
Four Firm Concentration = 67%
Number of Businesses = 24,901
Industry Overview - Barriers to EntryIndustry Overview - Barriers to Entry IBISWorld rates the degree of barriers to entry as: low and steady
Industry Overview – Technology & SystemsIndustry Overview – Technology & Systems
Level of Technology Change has been Medium
Greater use of telephone and online services to deliver advice, ordering, etc.
◦ More companies operate delivery-based weight loss services through an online platform
Industry Overview - Industry AssistanceIndustry Overview - Industry Assistance
Level of Industry Assistance and the trend is Medium and increasing
Tax deductions available for individuals who have conditions (i.e. heart disease, hypertension) that could benefit from weight loss treatment.
Industry Overview - Industry PerformanceIndustry Overview - Industry Performance
Life Cycle Stage: Moderate growth
Industry Overview - CompetitionIndustry Overview - Competition Competition is high and increasing
Industry Overview - Key Success FactorsIndustry Overview - Key Success Factors
Industry GrowthIndustry Growth
Annual growth 07-12 = -2.4%
Expected Annual Growth 12-17 = 2.5%
2012 Revenue = $2.7 billion
2012 Profit = $313.3 million
Factors of weight loss program consumptionFactors of weight loss program consumption
Google Trends: 2004 - PresentGoogle Trends: 2004 - PresentGoogle Trends: Analyzing 2010Google Trends: Analyzing 2010
Major Market SegmentationMajor Market Segmentation Women are the largest purchasers of industry services
◦ Make up over 85.0% of members◦ 70 million people are on a diet – 20 million are men
However, higher percentage of American men are overweight or obese Spending on weight loss services also varies depending on a consumer’s age.
Business LocationsBusiness Locations
The Southeast◦ 26.9% of industry establishments ◦ Highest obesity rates: Kentucky,
Louisiana, Mississippi and Oklahoma all have obesity rates over 30.0%.
Mid-Atlantic◦ 17.6% of industry establishments ◦ Region has slightly higher-than-average
per capita income level, making consumers more likely to spend on discretionary services.
West◦ ~16.5% of industry establishments◦ California, alone has 13.2%
Great Lakes◦ 13.4% of industry establishments
Dependent on population levels, as well as obesity rates and disposable income levels
Business LocationsBusiness Locations
RegulationsRegulations Regulation in the industry is Medium and Steady
◦ The FTC regulates laws related to advertising, disclosures to consumers, privacy, consumer pricing and billing arrangements.
◦ Individuals under legal age require parental or guardian before beginning a professional weight loss program
Major PlayersMajor Players
Major PlayersMajor Players
Weight Watchers
Nestle (Jenny Craig)
Nutrisystem
Weight WatchersWeight Watchers
Market Share = 39.4% Began in NY in 1963 As of 2012, has 1.3 million members Meeting fees make up over 54.0% of the company's
revenue Sells products (bars, snacks, cookbooks, food and
restaurant guides) – 15.4% of revenue Internet revenue – 22.0% of revenue
Jenny CraigJenny Craig
Market Share = 11.6% Founded in 1983 in Melbourne, Australia Now owned by Nestle Has provided services to more than 5 million members Offers 80 entrées and snacks to clients Sells videos, cookbooks and exercise accessories Consultants offer advice and encouragement to members
NutrisystemNutrisystem
Market Share = 15.1% Established in 1971 Typical customer is female and about 50 years old Offers home-delivery meal program with low-calorie and
portion-controlled meals Counselors are available to answer questions and make
recommendations to clients (online tools and counseling)
Primary Advertising Primary Advertising MethodsMethods
Informative AdvertisingInformative Advertising
PriceEaseDisclaimersMethods of Access
◦ Website◦ Phone Number
Science and Health
Science in Weight Loss AdsScience in Weight Loss Ads Nutrisystem uses the science of the "glycemic index" to
differentiate "good carbs" from "bad carbs"
Celebrity EndorsementsCelebrity Endorsements
Weight WatchersWeight Watchers "Expect Amazing" Campaign"Expect Amazing" Campaign
Use of celebrity endorsements (Jennifer Hudson, Jessica Simpson)
Mention new "Weight Watchers 360" program which is "built for human nature"
Relate to people who have failed at diets before
Mention typical "non-diet" foods that you can eat on the program
Expect Campaign
Average People TestimonialsAverage People Testimonials
Include Emotional Stories
Try to relate to audience they are targeting
Explain Product Attributes through narrative
"The I'm only human and I did it Project""The I'm only human and I did it Project"
A compilation of video blogs from average people (and celebrity endorsers) giving unedited and unfiltered testimonials of their successes with Weight Watchers.
As an experience good, these ads strive to enhance perceived quality and credibility of the service
Targeted AudiencesTargeted Audiences
Young WomenMothers
Men
Targeting Moms: "We Know Moms" CampaignTargeting Moms: "We Know Moms" Campaign
Launched by Jenny Craig with actress Nicole Sullivan
Targeting Men: Weight Watchers for MenTargeting Men: Weight Watchers for Men
Feature celebrity NBA player Charles Barkley
Frequent use of humor
Mention of typical "man foods" such as beer, wings, pizza
Break stereotype that diets are for women
Humor AdsHumor Ads
Less common
Used more for ads targeting men
Charles Moment
Emotional BenefitsEmotional Benefits
Important for an Experience Good
ConfidenceHappinessReclaimed YouthLove Life
Typically used in testimonials and are important for an Experience Good
Valerie Bertinelli for Jenny CraigValerie Bertinelli for Jenny Craig
Product PlacementProduct Placement
Food AppealsFood Appeals
Visuals
Recipes
Branded Food
Sex AppealSex Appeal
Before and After
Improved Sex Life
Nutrisystem CampaigNutrisystem Campaignn "A Different Approach" "A Different Approach"
One testimonial: ◦ "Since nutrisystem, my sex life is excellent."
Another ad questions:◦ "Has your sex life slowed down or come to a screeching
halt?"
Internet AdvertisingInternet Advertising
Website with Online Tracking and tools
Special Online Ads only and Video Blogs
Online Calculators
Weight Watchers’ Weight Watchers’ Ana Gasteyer Online CampaignAna Gasteyer Online Campaign
Exclusive online campaign featuring celebrity comedian
Different approach from the usual uplifting, inspirational spokespeople that are normally used
Social MediaSocial Media
Comparative AdsComparative Ads
Weight Watchers Comparisons◦ 'No Counting!'
Nutrisystem Comparison Website
Advertising ExpendituresAdvertising Expenditures
Weight Watchers ◦ 2012 Advertising and
Marketing Expenditures $27,437,000 (Source: Mergent Online)
◦ 2012 Ad-to-Sales Ratio of 18.31%
Raw Data AnalysisRaw Data Analysis
Advertising Strategy Data AnalysisAdvertising Strategy Data Analysis
1. Collecting Raw DataWatch a variety of commercials to get a feel of the
industry and possible strategies◦ create a comprehensive list of these strategies with a
coding mechanism
0= no use of the strategy1= use of the strategy
Continuous count method also used for product characteristics
Advertising Strategy Data AnalysisAdvertising Strategy Data Analysis
2. Watch Advertisements◦ Weight Watchers= 10 Ads◦ Jenny Craig= 10 Ads◦ Nutrisystem= 7 Ads
Coding scheme was employed while we watched the ads
3. Analysis of the Raw Data collected
Results from Analysis- Weight WatchersResults from Analysis- Weight Watchers
Weight Watchers differentiates itself from competitors by more often employing these strategies in ads:◦ Real People◦ No mention of actual pounds lost◦ Mobile App Mentioned◦ Musical ads◦ Humor ads◦ Targets Men
Results from Analysis- Jenny CraigResults from Analysis- Jenny Craig
Jenny Craig differentiates itself from competitors by more often employing these strategies in ads:◦ Testimonials◦ Waist size/dress size mention◦ Use of emotional stories◦ Support System◦ Targets Mothers
Results from AnalysisResults from Analysis -- NutrisystemNutrisystem
◦ Celebrities◦ Average pounds lost was over
20 lbs◦ Website mentioned◦ High Product Characteristics
count◦ Mention of "non-diet" foods◦ Disclaimers◦ Before and Afters
◦ Mention of benefits other than weight loss
◦ Price ◦ Special Offers◦ Own Branded Food Mentioned◦ Ease of Use◦ Visual of Foods◦ Science of weight loss◦ Variety
Nutrisystem differentiates itself by more often employing these strategies in ads:
Celebrity
Real People
Targets MenTargets Mothers
Waist Size Mention
Price
HumorEmotional Stories
Mentions Health Benefits
Mention Non-Diet Foods
Support SystemEase of Use
Investment and Investment and Advertising Advertising
RecommendationsRecommendations
Investment StrategyInvestment Strategy
As with any investment, one must evaluate their portfolio and risk/return preferences
That said, of the three, we would invest in Weight Watchers◦ US based (Nestle based in Switzerland)◦ Performing well and growing (less risky than Nutrisystem)◦ Most flexible option to fit into everyday life
Recommended Advertising StrategiesRecommended Advertising Strategies
Appeal to Older people◦ Nutrisystem expected to expand food system
and advertise the nutritious nature for aging bodies
Appeal to Children◦ Obesity in children is a growing epidemic.◦ According to the CDC, it has more than
doubled in the past 30 yearsAppeal to Men
◦ Higher percentage of American men are overweight or obese than adult women
Questions?Questions?
The EndThe End