Marketing

Read this first and the instructions to start the paper are on the second page. For writing the paper
it is important to look at the survey question and responses I provided to u here. Everything is
being explained on the second page. Thank you
1) Problem Formulation/Identification
Identify a current marketing issue facing a consumer company.
After a series of questionable marketing choices and unfortunate product and logistical
complications, Peloton’s stock price has reached its lowest point since March 2020, and investors
are urging for a change in management (Bove, 2022) (Fontanella-Khan, 2022). On January 10,
the company decided to temporarily halt the production of its flagship products due to dwindling
consumer demand (Thomas, 2022).
During the pandemic boom, Peloton became one of the most sought-after stocks and
desired at-home workout equipment. A series of logistical complications stalled its success; it
was struggling to meet its shipping promises. The company’s growth was accompanied by a
surge in demand that it could not meet. Customers were waiting for their products for weeks and
even months at the beginning of 2021. To make things worse, the buyers were paying for their
bike or treadmill during these delays, increasing frustration and disappointment towards Peloton
(Picoult, 2021).
The organization tried to react by increasing production and expanding its shipping
strategies (McGee, 2021). However, this resulted in an undesired abundance of inventory,
causing the halt mentioned above (Bove, 2022). Experts say that Peloton might have
underestimated the impact of the pandemic recovery. The situation is so dire that the CEO is
considering layoffs to control costs after an inaccurate forecast in demand (Valinsky, 2022).
Additionally, the willingness to pay consumers does not match the prices of the products
(Segal, 2022). After the company tried to discount its flagship bike, it raised prices to cover
shipping and installation costs (Furst, 2022). Moreover, competitors are providing more
attractive alternatives at potentially better prices than Peloton (Segal, 2022). The company
decided to lower the cost of its digital subscription to increase its market share without selling
more hardware; however, this strategy is directed to a different and new audience, and it might
take months to prove useful. (Forman, 2021).
Furthermore, pandemic and subscription fatigue are influencing consumer behavior.
Peloton is not the only “at-home” stock going down. Both Zoom and Netflix have been losing
value and users; now that restrictions are going away, consumers are trying to socialize and leave
their houses again instead of staying home (Bove, 2022) (Murphy, 2021). Traditional gyms are
offering hybrid services, combining their in-person venues with at-home digital subscriptions to
provide “the best of both worlds.” (Masters, 2021).
“The resale marketplace OfferUp said the number of people seeking to sell their Peloton
machines has jumped since April. It’s seen a 77% increase in Peloton sellers versus a 25%
increase in people looking to buy a Peloton fitness machine in that same period on OfferUp.”
2) Consumer Behavior Issues and Analysis 2 page Single Space.
Identify the specific consumer behavior issues relevant to the problem. Apply discussed
concepts/theories to study/understand/explain the issues.
Issue 1) Price and Willingness to pay
The willingness to pay. Based on our data, many households have a high income, but they
are not willing to pay too much for peloton equipment like treadmills or bikes. Many
participants in our survey thought the peloton is expensive. Also, Peloton has an app and
people need to pay for the app every month, again based on our survey and the results
they do not want to pay much. This is an issue for Peloton. The majority of responses
said: peloton equipment is so expensive also, they do not like to pay that much.
For example: Have you considered purchasing or subscribing to Peloton’s products
(bicycle treadmill and/or fitness subscription?
The majority of people said: No
and they were asked to elaborate briefly on why you decided not to purchase
Peloton’s product.
Participants answer:
● Out of my price range
● Too pricey
● I currently do not have the space for a peloton in my apartment/ it’s expensive
● Have access to two amazing fitness centers and don’t need equipment taking up
space at home.
● It seemed out of my price range compared to all the amenities of my gym
membership which is very affordable.
● Way too expensive
● Decided to purchase another brand…lots of research to choose from. Went for
value (performance for cost). I Felt peloton price was inflated and I could use the
peloton app if I didn’t like the app for the brand I bought (
● Too expensive. Nowhere to put it. I get bored of exercise machines. Rather go to
the gym or run outside
● They were too expensive.
● Price and space
● Cost and space, but that was for the bike and also several years ago
● The bike was more expensive than I was willing to pay for and I was interested in
other workout options
● So expensive
● Gym goer
● Cost of Peloton, and I enjoy fitness club spin classes
Also in this section lease talks about some of the competitors that offer cheaper equipment
comparing Peloton.
Issue 2)Life-Style Change
We looked at the data, and saw that people’s lifestyle changed during the pandemic, they
had to do the workout at home, now with the covid restrictions lifted, based on our survey
people’s life style has changed and they like to go back to the gym and work out outside.
So this is another issue for Peloto
In the survey, we asked:
What is your preferred exercise format?
Most people responded: Gym/ Fitness Studio
For instance some of the responses:
● Yes during the early parts of the pandemic I was unable to go to the gym so I did
homework outs. I am now back at the gym
● Incorporate more outdoor workouts, use peloton run outside often