Weight Loss Programs Lauren Glasky, Nicole Nava, Ben Wainberg
Agenda Industry Overview Major Players Primary Advertising Methods Raw Data Analysis Recommendations
Why Weight Loss Program Industry? Growing industry because:
Industry 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 & Structure HHI = 1,915.74 Four Firm Concentration = 67% Number of Businesses = 24,901
Industry Overview - Barriers to Entry IBISWorld rates the degree of barriers to entry as: low and steady
Industry 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 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 Performance Life Cycle Stage: Moderate growth
Industry Overview - Competition Competition is high and increasing
Industry Growth Annual growth 07-12 = -2.4% Expected Annual Growth 12-17 = 2.5% 2012 Revenue = $2.7 billion 2012 Profit = $313.3 million
Google Trends: 2004 - Present Google Trends: Analyzing 2010
Major 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 Locations • Dependent on population levels, as well as obesity rates and disposable income levels • 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
Regulations • 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 Players Weight Watchers Nestle (Jenny Craig) Nutrisystem
Weight 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 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
Nutrisystem 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)
Informative Advertising • Price • Ease • Disclaimers • Methods of Access • Website • Phone Number • Science and Health
Science in Weight Loss Ads Nutrisystem uses the science of the "glycemic index" to differentiate "good carbs" from "bad carbs"
Weight Watchers"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 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" 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 Audiences Mothers Young Women Men
Targeting Moms: "We Know Moms" Campaign Launched by Jenny Craig with actress Nicole Sullivan
Targeting 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 Ads Less common Used more for ads targeting men Charles Moment
Emotional Benefits Important for an Experience Good Confidence Happiness Reclaimed Youth Love Life Typically used in testimonials and are important for an Experience Good
Food Appeals Visuals Recipes Branded Food
Sex Appeal Before and After Improved Sex Life
Nutrisystem Campaign"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 Advertising Website with Online Tracking and tools Special Online Ads only and Video Blogs Online Calculators
Weight Watchers’ Ana Gasteyer Online Campaign Exclusive online campaign featuring celebrity comedian Different approach from the usual uplifting, inspirational spokespeople that are normally used
Comparative Ads • Weight Watchers Comparisons • 'No Counting!' • Nutrisystem Comparison Website
Advertising Expenditures • Weight Watchers • 2012 Advertising and Marketing Expenditures $27,437,000 (Source: Mergent Online) • 2012 Ad-to-Sales Ratio of 18.31%