As competition in the weight loss market heats up, Weight Watchers International (WTW) is bringing new marketing ideas in to help grow the company's number of customers. Weight Watchers has been successful at targeting women with its weight loss Points Plus program, but recently has launched a massive advertising program aimed at men who want to lose weight. This targeted market along with a new smartphone application and relationships with workplaces have Weight Watchers looking like the weight loss company to beat.
Weight Watchers was founded in 1963 by a homemaker of the name Jean Nidetch. Over the years the weight loss program has changed but most recently revolves around the Points Plus system of placing point values on food items. Each person on the diet is allowed a certain amount of points each day based on weight, height, age, and physical activities. Up until recently the company's main target demographic was older women. Through new programs the company now has been gaining market share among men and younger women. The company is stepping up its game in targeting males with a targeted website to try its weight loss program.
Weight loss companies usually use testimonials, whether ordinary people or celebrities, to showcase results to American's through print or television advertisements. Weight Watcher's current male spokesperson is Charles Barkley. Once known as the "Round Mound of Rebound", Barkley was a dominant physical presence around the hoop in basketball games. The commercials featuring Barkley utilize the "Lose Like a Man" game plan the company has devised. The former NBA star has lost over thirty pounds while being a paid spokesperson for Weight Watchers.
Weight Watcher competitor Nutrisystem (NTRI) currently uses Janet Jackson and Terry Bradshaw as its company spokeswoman and spokesman respectively. Nutrisystem had Dan Marino as a former spokesman and has used former athletes and males for several years to target both sexes trying to lose weight. The competition is still fierce in the weight loss market and Weight Watchers needs to continue growing and appealing customers away from other competing companies.
Another new initiative of Weight Watchers involves an application for smart phones including Apple iPhones (AAPL) and Android (GOOG) phones. Weight Watchers introduced an application that acts as a barcode scanner to help with meal decisions. Customers can scan any item with the application and receive the number of Points Plus points immediately available on the phone. The application will help users make smarter decisions when it comes to grocery shopping decisions. Chief Executive Officer David Kirchhoff recently discussed the application while at the JPMorgan (JPM) Global Healthcare Conference.
Weight Watchers has also made a push into the corporate healthcare world. Health premiums have risen for corporations around the United States, as CEO Kirchhoff pointed out. The company recently announced deals with the New York Stock Exchange (NYSE) and American Express (AMX). Under the deals the companies are paying for 100% and 50% of Weight Watchers costs respectively. The deals provide employees with access to Weight Watchers programs and meetings in an attempt to create healthier workers and cut down on health insurance premiums. It should come as no surprise that workplaces are accepting Weight Watchers programs. As CEO Kirchhoff pointed out, his company offers a high return on investment as $18.95 a month for Weight Watchers to help get fit is cheaper than high health care costs.
Weight Watchers is not a dieting company that offers food products to its customers. The company serves as a teaching tool to its targeted market. While several food items are available with the Weight Watchers brand, the company differentiates itself by endorsing food items like several from DineEquity's (DINE) Applebee's Restaurants. Weight Watchers enjoys operating margins of 29%, compared to rival Nutrisystem's 8%.
The push into the men's weight loss market will be heavily marketed. Weight Watchers has been rolling out commercials featuring Charles Barkley and placing them prominently on male driven television stations including: ESPN, Spike, and Comedy Central. Shares of the weight loss company traded as high as $87 in the last fifty two weeks, back in May.
Keep an eye on subscription numbers and earnings reports throughout the year. The company has plenty of room to grow as its customers shrink.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.