1. Introduction
According to the definition of the 4th Industrial Revolution by Klaus Schwab, it can be referred as a convergence of diverse technologies, and presented by IoT(Internet of Things), 5G (fifth-generation wirelesstechnologies), 3D/4D printing, AI (Artificial Intelligence), robotics, biotechnology, nanotechnology, block chaintechnology, quantum computing etc. [1]. Specifically, IoThas been pervasively expanded as a key role in the 4 th Industrial Revolution. Furthermore, initially explained by Cis co, Internet of Everything (IoE) and Internet of Brains (IoB) are also used as the advanced terms of IoT integrating J. Internet Comput. Serv. people, process, data, and things [2]. Since Industrial Internet of Things (IIoT) initially was introduced in Proctor and Gamble and later MIT’s Auto-ID Center in 1999, it has been expanded to IoT, IoE, and IoB, and more relevant applications for them have been developed in the real world [3].
Next to matured smart phones market, wearable devices are considered as the top of line to be developed for mobile devices as the application of IoT [3]. Some representative wearable devices as applications of IoT have beendeveloped in the areas of watches, wrist bands, eye glasses, shoes, headgear, pendants, clothing, and sensors/robots etc. [4]. Abundant research has been conducted on the applications of IoT. While some results are positive to application development of IoT, others are not. Even though the technologies for wearable devices development are important, market acceptance of those technologies may more important. A traditional two competing perspectives of the strategies for invention and innovation, ‘ technology push’ or ‘market (demand) pull’, are also important forapplication success of wearable devices [5].
Regardless of the two different strategies for innovation and invention, customer utilities (satisfaction) should becreated through using wearable devices, which means valuecreation. The value should be greater than price payed by customers, which should greater than costs incurred throughout the development and production processes. Diverse perspective has exist on this subject. For instances, (1) 4P’s classification (Product, Price, Promotion, and Place) introduced by McCarthy proposed in 1960, which has since been used by world wide marketers [6]. (2) NTER(Needs, Technology, Economics, and Regulation) for the market analysis [7] [8]. (3) TAM (Technology Acceptance Model) by Davis in 1988, which explain how users cometo accept and utilize a technology [8]. All of above three provide valuable insights in the personal level for successuldevelopment of innovative and inventive products likewearable devices.
Among diverse wearable devices introduced in the market, activity trackers, which are also called fitnesstrackers as types of wrist bands, were selectedfor this research. The reason of selection is that activity trackers are exemplar wearable devices, and these were introduced inglobal market as well as expanding in Korea. Despite of the pervasive spread of the wearable devices in our real lives, the research on activity trackers has not been conducted sufficiently in the academic arena including Korea.
The main purpose of the research is to identify customerneeds (the first item of NTER) for the activity trackers and further to link their needs to Marketing Mix of 4 P’s. It is also closely related to the TAM, which was described above. For this research, the survey method was conducted and data were collected from university students in Korea. In addition to descriptive analysis, ANOVA were applied for the statistical analysis. Further, word clouding technique was also used to visualize some potential needs for functions and design identified through the survey.
2. Activity Trackers as IoT Applications
2.1 A Type of Wearable Devices: Activity
Trackers
Wearable devices are combined of wearable and devices, which are attached to or worn on the human body. Iteventually means that ubiquity of ‘anytime and any where ’are possible, because users wear the devices. Wearable devices include devices with sensors, users, and terminals for the function like servers. Wearable sensordevices collect data and send smart terminals. Smartterminals like activity trackers analyze data and feedback the analytic results to users. Smart terminals sometimescontrol users according to users’ context.
Wearable devices usually can be categorized by threedistinct types (1) lifestyle, (2) entertainment, and (3) health care [9] [10]. Lifestyle wearable devices provideconvenience and simplificationof daily life. Entertainment type is related to music, game, and movies for providing pleasure of users. Healthcare type is focused to promoteusers & rsquo; health and vitality. For the research focus and statistical analyses, the research is limited to health care type wearable device among the three. According to the statistics for wearable devices users from 2013 to 2018, activity trackers are mostly used up to 61% of total wearable devices users [8] [11]. Representative brands for the health care wearable devices in the world are Fitbit, Garmin, Fuelband, Jawbon, Xiaomi etc. Compare to the former research conducted in 2015, Garmin and Xiaomi have grown as new market leading brands [12].
Representative of healthcare type wearable devices, activity trackers usually monitor diverse physical activities like distance, steps, exercise time, calorie consumption, sleeping type tracking, heart rate etc. Activity trackerscommunicate users’ activity data with other Blue tooth-enabled devices through the Bluetooth technology like smart phone or personal computers. Activity trackstrack users’ physical activities, and further can compare the activity data to those of other users of the same usercommunity. By comparing the data, users are motivated topromoting or controlling their activities. Collected user datacan be big data, and some meaningful heath information can be analyzed from the big data. Because telemedicineusually depends on big data as well as ICT, wearable devices, specifically activity trackers, are considered as a prerequisite for applications of telemedicine.
More popular smart watches are different from activity trackers. Smart watches’ primary functions are very similar to smart phones, and partly encompass the functions of the digital wallet for a small money transfer and users & rsquo; health care. On the other hand, activity trackers arededicated to users’ healthcare. Those help their users control weight, promote physical activities, or improve overall health. Fitbit, Garmin, Nike Fuelband, Jawbon, Xiaomi, and Inlab are exemplar activity trackers in the world market, and Inlab from Inbody is the only product of Korean.
2.2 Product Features of Activity Trackers
and Survey Questions
According to the review article [7][8] [13], activity trackers are usually reviewed under the following features; (1) wearable style (e.g. wrist band, ankle band, armbandetc.), (2) costs (e.g. under $40 to above $200), (3) water safe (e.g. splash/water resistant, and water proof), (4) steps, (5) elevation/stairs, (6) swimming and cycling (bike), (7) heart rate, (8) heart rate notes, (9) sleeping, (10) silentalarm, (11) calories consumed, (12) distance, (13) syncing(manual or wireless) (14) data viewing, (15) reviews. Because these are too comprehensive features, most activities encompass some of the features above as the marketing purpose. For this research some of the features are analyzed, which are important to the Product and Price of 4P’s in Marketing Mix explained above.
Product, the first of 4P’s, consists of functions and design. For the survey quesionnaire, the 9 closed questions were asked for the functions of activity trackers. Specifically, the functions encompass activity distance, number of steps, activity time, diet guidance, consumed calories, sleeping analysis, pulse, blood pressure and watch. Further, one open question is provided to identified users & rsquo;potential need for funtions. The 7 closed quesitons wereasked to design. Specifically, those are related to size, uniqueness, color, wearing comfortness, water proof, brand prestige, operating time after charging.
(Table 1) Survey Questions for Research
The price is composed of 2 questions, appropriate price and maximum affordable price. Moreover, the place of 4P’s consists of 1 question on the channel where the repondant would intend to purchase. 2 more questions were asked for completion of the questionnair as well as the final dimention of 4P’s, promotion. For instance, those are the specific brand familarity and intention to purchasing activity trackers and if the intention exists, the purchasing order between the two.
3. Mapping between Marketing Mix and Features of Activity Trackers
Marketing Mix can be reerred to a strategic mix of the controllable elements of the marketing plan of 4P’s(product, price, place, and promotion). These elements should be adjusted and coordinated until the right combination is found, which serves the needs of the product's customers (users, buyers), while producing optimum income [6] [7] .
The features are analyzed for the research by mapping with product, price and place of the Marketing Mix. Theresearch is to examine probable functions that the customers (users) needs (expectation), and acceptable and maximumprices they can afford. Furthermore, the research examinesthe channels that customers prefer to purchase them in. Diverse functions can be built in activity trackers. However because of the limitations of product (e.g. product size, weight, and applicable technologies) and economic feasibility, relative importance of functions should be identified beforeactivity trackers designers conceive the ideas.
While IoT applications are recently expanding in diverseareas, activity trackers are also the relatively new andinnovative product. Ordinary people are not familiar with them yet. The market may move over introduction stage togrowth stage of PLC (Product Life Cycle) among 4 stages; introduction, growth, mature, and decline/regeneration [14].
4. Research Methodology
4.1 Sample for Survey
4.1.1 Respondent Characteristics
The main research method is the survey, and questionnaires were distributed to the university students. University students are appropriate sample, because they usually know well advanced technologies and active users of smart phones. They might be the first potential purchasers (users), and smart phones are considered therepresentative comparable devices. If the product is novelin the market, the survey is usually conducted for the users who use comparable items. It is common for the hightechnology items.
While most closed questions on functions and design wereasked by 7 point Likert type scale from the least importance of 1 to most importance of 7, some questions were asked to be open for the identification of potential needs.
4.1.2 Descriptive Satistics for Fuctions and
Design Features in Designer’s Perspectives
The survey was conducted for university students through on-line from June 10, 2018 to June 15, 2018. 132 students (N=132) participated the survey, and all of theresponds were effective without missing or unreasonablevalues. As shown in table 1, the collected data used forstatistical analysis (N=132) by SPSS. Among 132 respondents, while 79 are male, 53 are female.
The first 9 feaures are related to functions, and the rest7 items are design features. According to the data, the average score of working time of activity trackers is the maximum value of 6.19, and standard deviation is theminimum value of 1.11. The values mean that battery volume and battery saving application and design are important with the relative consistancy.
Furthermore, wearing comfortness is 6.05, which is thenext important feature. Carlorie and sleeping modemeasurement are high scores, 5.40 and 5.28, respectively among functions of activity trackers. The designers ofactivity trackers should consider these statistic values. Forinstance, these data should be valuable in applying VE/VA(Value Engineering/ Value Analysis) during the new product development process.
(Table 2) Descriptive Statistics for Features by Gender
5. Research Analysis and Results
5.1 Product: Design and Functions
between Genders
The relative importance of function and design isidentified by average scores of Likert type scales as shown in Table 2. In order to examine gender difference, ANOVA were applied by SPSS. Specifically, ANOVA wereconducted to examine the difference by gender on the features, 9 function features and 7 design ones. In general, for the statistical analysis by ANOVA, Levene’s tests should be conducted for homogeniety of variance inadvance. Because all of the features for fucntions and designs were fullfil the homogeneous condition at thesignificance level of 0.05, ANOVA could be applied. In additions, reliability value in total is 0.852 represented by Cronbach ’s Alpha, which means the measurement is reliable.
As shown in Table 3, most features of the functions and designs, except watch, were not different between gender, at the significance level of 0.05. Gender difference was apparent for watchat the significance level of 0.05. Male respondents think watch is more important than the female ones (average 5.08 vs 4.49). This may imply that activity tracker designers should consider watch function for the activity trakers of male.Different from the research result, the previous research result in 2015 showed that uniqueness was the different between genders at the significance level of 0.05.
(Table 3) Functions and Design Difference by Gender
5.2 Price: Appropriate and Maximum
Prices
In order to examine the prices customers can afford(price elasticity), appropriate and maximum affordable prices were asked to the respondents. The result shows in Table 4. The mostly frequent appropriate price is about 100,000 Korean Won (48%), while the maximum affordable price is 200,000 Korean Won (30%). It implies that if product prices are set over 200,000 Won, majority customers will not pay for those.
Current market prices of the most products are similar to the most frequent maximum affordable price (200,000 Won, 30%). It implies that price policies would be restriced in the market, because current prices are similar to maximum affordable price. Different form the most activity trackers, Xiaomi, Chinese electronic company, introduces in the very competitive price (around 20,000 Won) [12]. In operationsperspective, operational excellence building the ways todecrease the current price (costs) will be an competative factor.
(Table 4) Prices: Appropriate and Maximum (Thous and: W)
5.3 Place: Dealer Types and On/Off-line
Channels
For the research, distribution channels which customersprefer to purchase are are important. The analysis results could be shown in Table 5.
Customers planed to purchase those in on/off-lineauthorized dealers (34% = 21%+14%). 34% of them intend to purchase in traditonal shopping malls like Aution, Gmarket, 11street etc. The ratio is higher than the previous research result (26%). It might imply that coustomers moreregarded activity trackers as household/sports electronicsthan (medical) health devices, in which reliablity and authenty is important. Marketing management should consider the changing trend when they develop distributionchannels.
(Table 5) Customer Preferred Distribution Channels
5.4 Promotions
Activity trackers were new products in 2015, and 29% of respondents did not know the products themselves. 62% know the product, but have never seen them actually. However, as shown in Table 6, the research results show the numbers decreased 22% and 52% respectively. While nobody (0%) uses the product and only 7% actually considered to purchasein 2015. The numbers increased to 14% and 13% respectively.
Activity trackers market is growing according to the PLC. Marketing management should apply appropriatemarketing policies for their positions on the PLC curve.
(Table 6) Familiarity on Activity Tracker.
6. Potential Needs for New Activity Tracker Development
Different from the previous research conducted in 2015, one of the major research purposes is examine the potential needs for activity trackers. Applied technologies for activity trackers are usually the advanced ones, and sometimes needs much investment. However, technology push-based new products often fail in the market, because innovativetechnologies do not guarantee market success if they do notreflect users’ needs. Technologies should be based on the market acceptance, so called market pull -based new product development approach.
(Table 6) Potential Needs for Future Product Development
The open question for the future functions was asked to examine potential users’ needs, which should be considered in the future product development processes by designers. In order to examine the users’ potential needs, word clouding techniques were applied. First, wording and expressions of the answers for the open question were preprocessed for inducing the consistent meaning. Common potential needs were categorized by the same terms through the preprocessing procedures. Second, the induced meanings were categorized into common concept as shown in Table 6.
In final, word clouding techniques were applied based on the induced meanings as shown in Figure 1.
(Fig. 1) Word Cloud for Potential Needs
7. Conclusions and Future Works
The research first explained the concept of marketing mix (4P’s), and activity trackers as exemplary wearable devices, leading applications of IoT. Secondly, through the empirical research (mainly ANOVA), functions and designs were tested, and some managerial implications have been found. Finally, potential needs were identified through word clouding techniques.
IoT is rapidly developing in technologies in areas of sensors, communication tools, and big data an lalyses. Market success of IoT applications is depends on the needsof users (customers), rather than the advanced technologies alone. That is, technology application to products and services coordinated to and congruent with customer needs. Otherwise the IoT applications would not be successfulbecause of market acceptance but technologies.
The research would expand the perspectives of designers of activity trackers as the first research in 2015 has d one. The research, through empirical analysis and word clouding techniques, identified potential needs for activity trackers. Respondents want the function of body fat index (22%), alarm for dangers (16%). Designers should apply VA/VE for achieving users’ needs (values) with minimal costs. In addition, the price should be under users’ maximum affordabe limits. The new technology product development has diverse perspectives, both management and engineering ones. The research conducted in 2015 and this research (in 2018) will provide implications to academic arena andindustry ones.
In the future, similar research should be applied smartwatches and the two consecutive research would be aresearch ground on wearable devices.
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