Situation Analysis of Garmin in the Wearable Electronics Market MKTG 3021

Situation Analysis

Industry

Growth in the past 5 years

The growth of consumer electronics industry has been steadily growing over the last few years. However, the rate of growth of retail volume decreased from 104% in 2021 to 101% in 2022. This was most probably because there were no recorded sales of video players in 2022 as compared to 2021 which was 65.2 units. With the rise in popularity of streaming services like Netflix, Amazon Prime, and Hulu, users now have instantaneous access to a plethora of media on a wide variety of screens, including smart Televisions, PCs, and smartphones. As a result, fewer people need to own physical video players. The product category which is the largest share of the industry would be mobile phones. Its growth has been increasing but not as rapidly as in the wearable electronics category.

Predicted growth

The consumer electronics industry is predicted to grow steadily over the next five years as wearable electronics are likely to be driving the trend. According to Passport, the wearable electronics product category is predicted to sell 6,219.7 units in 2027.

Product category

Growth in the last year

Moving into the product category part of the assignment, according to Passport, we can clearly observe that the wearable electronics segment has been growing as the retail volume from 2021 has risen up from 3.447 million to 2022s retail volume of 3.781 million units. In the aftermath of the COVID-19 pandemic, when many people were working from home, there may have been an increase in demand for wearable gadgets that aid in productivity and communication, as many realised that they were not as physically active prior to the outbreak.

Performance in the past 5 years

The growth of the market has been steadily increasing from 2017 to 2020 from a 10% increment to a 15% increment at the end of 2020. However, in 2021 the sales volume decreased from 15% to 10% growth and remained with a 10% growth for the year 2022 as well. The 5?crement in 2021 was most likely because the COVID-19 pandemic may have impacted the wearable electronics market because consumers may have prioritised essential needs rather than discretionary purchases like wearable technology. More individuals are working from home and engaging in less physical activities as a result of the epidemic, which has also changed consumer behaviour. There may have been a decline in demand for wearable fitness monitoring gadgets as a result of this shift in lifestyle. Also, there may not have been as much demand for wearable technology with connection functions as there was previously due to individuals spending more time indoors and restricting their social contacts.

Comparison with adjacent market

An adjacent market to wearable electronics would be the mobile phones market. While the retail volume of mobile phones did fluctuate over the five years, its growth was very small compared to the variable electronics industry. Consequently, it is evident that the ratio of phones to variable electronics has decreased as a result of the wearable electronics industry growing at a speedy rate. This is due to the possibility that as wearable gadgets like smartwatches, fitness trackers, and other smart accessories gain popularity, consumers may decide to buy them in addition to or instead of conventional phones. Additionally, as smart home gadgets proliferate, people might use them to manage their home automation systems, which can be done using a smartwatch or other wearable gadget.

2.2. Product segments

Garmin watches product line has 11 product segments in total, namely (1) watches for women, (2) Fashion & Hybrid Smartwatches, (3) MARQ Luxury Watch Collection, (4) Running, (5) Multisport & Triathlete, (6) Adventure, (7) Swimming, (8) Diving, (9) Golf, (10) Fitness & Health Tracking, and (11) Just for Kids. All of the product segments aim to help users track and improve their health rather than just a normal watch that only allows users to know time and date. Each product segment integrates innovations and highly-advanced technologies that make Garmin reputable in comparison with its competitors. For example, in 2003, Garmin invented the Forerunner 201, the first jogging watch with GPS functionality. Since then, the Forerunner line has gained recognition as the top smartwatch option for athletes of all abilities worldwide (Garmin, 2020).

It is interesting to note that product segment has no distinct classification for mens watches. It is denoting a shift in perceptions of gender to target gender equality in the context women has suffered from different discriminations. Wearable watches are usually known to be used mainly by men (Gupta et al., 2022). Watch industry in general and Garmin in particular have shifted its focus women in recent decades. Models like the Lily smartwatch from Garmin, which was an original design rather than just a scaled-down version of an established men's model, were the result of efforts to appeal to female collectors (Lankarani, 2022). It seems that Garmin emphasizes gender equality, which a bit targets to appreciating women in its products.

2.3 Brands

Generally, Garmin watches are known for being among the most dependable, high-quality watches available in the field of fitness trackers and health wearables. Garmin is a highly accurate fitness tracker first, with some versions including smartwatch features, while other smartwatches have added fitness tracking features (Dustin & Showcase, 2022). In fact, the majority of Garmin's watches for adults give fundamental fitness features like step counting and sleep monitoring, as well as smartphone notifications, so there is actually a lot of feature and design overlap (Harris-Fry & Jamie, 2023). Garmin brand is among leading watch brands besides other giant players, such as Apple Inc., Fitbit, Motorola, Sony Corporation, Samsung Electronics, LG Electronics, Huawei Technologies Co. Ltd. , Fossil Group Inc, and Google Inc (Yahoo Finance, 2022). Garmin brand is also rated in the list of 100 watch brands in the world in 2009, 2017, and 2019.

Table 1: Ranking of Garmin brand in the world (Ranking per Brand, n.d.)

It can be seen that though Garmin is reputable in the world, the brand is not always in the list of 100 top brands. The discontinuous ranking proves that there have been years in which Garmin might be out of the list.

Garmin watches can be broadly divided into six brands. There are technically more than six options available from Garmin, but for the majority of customers, the Fenix, Forerunner, Vivoactive, Vivosport, Vivosmart, and Vivofit Junior brands are the most popular. However, it can be grouped into three large brands: Fenix, Forerunner, and Vivo (Harris-Fry & Jamie, 2023). These brands are differentiated by their functionality and features. With the diversity of sub-brands, functionality and features, these all sub-brands together make Garmin watches reputable and fit any gender at any age.