Table of Contents

I.Introduction.....................................................................................................................3
I.1 Innovation.............................................................................................................................3
I.2 Background...........................................................................................................................3
I. 3 Type of Innovation................................................................................................................3
II. Situational analysis........................................................................................................3
II.1 PEST.....................................................................................................................................3
II.2 Competitor analysis..............................................................................................................5
II.3 End User and Market............................................................................................................5
II.3.1 Target strategy..................................................................................................................5
II.3.2 Market segment................................................................................................................5
II.3.3 Consumer psychology........................................................................................................6
II.3.4 End User............................................................................................................................6
II.3.5 Persona.............................................................................................................................6
II.3.6 TAM (Total Addressable Market).......................................................................................7
Top-Down TAM............................................................................................................................................7
Bottom-Up TAM...........................................................................................................................................7

III. Marketing strategies.....................................................................................................7

III.1 Strategic focus and positioning............................................................................................7
III.2 Objectives...........................................................................................................................7
III.3 Marketing mix.....................................................................................................................7
III.3.1 Product.............................................................................................................................7
III.3.2 Price.................................................................................................................................9
III.3.3 Place.................................................................................................................................9
III.3.4 Promotion........................................................................................................................9
III.3.4.1.......................................................................................................................................9
III.3.4.2.....................................................................................................................................10
IV. Critical analysis...........................................................................................................12
V. Conclusion...................................................................................................................13
VI. References..................................................................................................................13
I.Introduction
I.1 Innovation
An AI-enabled shoe is a pair of shoes that employs a map and an automated roller to
transport its user to a predetermined location, navigating obstacles and obeying traffic
regulations on the fly through its mobile app. Moreover, by utilizing complex rules,
algorithms, and up-latest technologies, the AI-enabled shoe can provide real-time,
individualized feedback on training and performance in all aspects of nutrition, physical
exercise, sports, and overall health.
I.2 Background
The innovation was established based on the observation of AI development. A machine-
based AI system can influence the environment by making forecasts, suggestions, or
judgments for a set of objectives. It uses machine and/or human-based data and inputs to (i)
perceive real and/or virtual environments, (ii) abstract these perceptions into models through
automated analysis (e.g., machine learning), or manually, and (iii) apply model inference to
create results. AI systems act autonomously. (Anon, 2022) Given the fact that AI now is in its
“Golden Age”, we see its potential to have a significant impact on the economy in terms of
productivity, growth, inequality, market power, innovation, and employment.
I. 3 Type of Innovation
According to Dieffenbacher, there are 4 types of innovations which are taken into account. AI
- enabled shoes is identified as radical innovation, which entails creating completely new
products, services, or processes that alter existing markets or establish new ones. It disrupts
established technologies, products, or company structures requiring major investment in
research and development.

II. Situational analysis

II.1 PEST

Factors Positive/ Importance and effect on

Neutral/ innovation
Negative

Political In July 2017, China’s State Positive This will be an advantage for
Council issued the country’s the AI - enabled shoes
AI development plan, titled adoption in China, as the
“New Generation Artifical perception of AI innovation
Intelligence Development is crucial to accelerate
plan”, with the ambition to productivity growth.
become the global leader in AI
industry by 2030, turning AI
into a trillion business and to
appear to be a driving force in
shaping ethical norms and
standards for AL. (China’s AI
Development Report, 2018)

Economical China places a heavy Positive These favourable conditions

 Government Investment on AI,
which contributed to nearly
10,000 studies on AI published
and 30 university research labs
focused on AI (SCImago
Journal & Country Rank,
2015). Moreover, China will
also make up for 8.9% of
worldwide AI investment. The
availability of data also
enables China to establish a
data-friendly ecosystem based
on standardised norms and
cross-platform sharing, which
allows AI to continuously
improve and refine the output.
China is also considered to
own the highest spending
power among Asia countries
based on large population and
economic growth.
Social Chinese hold a positive
attitude towards healthcare and
safety aspects, which are
proven AI applications in
healthcare, environment,
education and security.
Moreover, China is taking big
steps towards environmental
sustainability.
Technological In order to protect intellectual
property rights and patents,
China The State Intellectual
Property Office (SIPO) is
taking responsibility to ensure
these issues. Moreover, The
Cyberspace Administration of
China issued new rules on
deep-synthesis technology,
including counterfeits and
other types of generative AI
systems, in January.
II.2 Competitor analysis
in terms of China's economy
have shaped the development
and growth of AI innovations
in China. Due to the matter
of fact, AI - enabled shoes
will be welcomingly adopted
thanks to high consumers
disposable income.
Positive AI - enabled shoes satisfies
some social issues related to
human society. Besides
keeping track of user’s health
performance, AI - enabled
shoes also have the potential
to enhance the safety and
efficiency of traffic
networks. AI - enabled shoes
with a long cycle of use helps
reduce the impact on the
environment.
Positive Ai - enabled shoes are
considered highly ethical
since they satisfy all of the
ethical concerns through a
specific ethical framework,
such as focusing on
enhancing human well -
being, protecting privacy and
safety, ensuring
controllability and credibility
 Competitor USP Feature Strengths

Nike Making shoes that are - Self - lacing can be - Smart sneaker that
“Adapt more than just controlled the app automatically adjusts
BB” accessories becomes a - Bluetooth connectivity to the wearer's feet via
natural extension of app controlled
the human body. - Large battery
(Carman, 2019) captivity
- Modular component
is intended to be
interchangeable

Xiaomi Fashionable, - Built - in Intel Curie chip Having the versions

intelligent and processor, which can of with and without
affordable shoes for display the total calories the chip so it targets a
everyone burnt of users by larger audience
differentiating between
running, walking and
climbing

II.3 End User and Market

II.3.1 Target strategy
AI - enabled shoes marketing strategy is identified as Niche marketing, which is made up of
consumers who share similar demographic, purchasing, and/ or lifestyle characteristics. Even
so, there are significant differences in motivations among consumers who share a given
segment’s behavior.
II.3.2 Market segment

Geographic  China takes place as the leading country in this region for applying
AI technology in education, healthcare, service, along with its
further investments in AI research and development. For example,
Alibaba is well - known for its AI implementation in expanding
services.
>>> Chinese consumers

Demographic  Teenagers and young adults (Age range: 15 - 35)

 Mid - high group earner
 Better educated
 Female & Male

Psychographic  Tech - savvy

 Fitness enthusiasts
 Outdoor adventures
 Travellers

Behavioral  High degree of technological purchasing behavior

 Price - sensitive shopping behaviors
 Willing to try new technology innovations
 Seek for newest innovations
II.3.3 Consumer psychology
The growing number of upper middle-class and wealthy Chinese customers has benefited
premium and high-quality goods. This adds to consumers' willingness to spend more money
on higher-end brands and product categories that make them look and feel good. As a result,
AI - enabled shoe marketing strategies intended to capitalize on the self - expressive benefits
of tech savvy consumers in order to positively impact their intent purchases. Chinese
consumers tend to give close attention to AI-enabled shoes that appear high tech, modern,
exclusive, and luxurious.
Furthermore, studies have revealed that the typical Chinese person spends nearly 2 hours per
day watching short-video apps. Nonetheless, rather than depending on promotions, Chinese
consumers base their purchasing decisions on product content. (Zipser et al., 2022) It's also
noteworthy that the Chinese consumer market is becoming more discerning. Understanding
all of these ideas aids in the development of effective market strategies for communicating
with Chinese buyers once AI-enabled shoes are introduced into the Chinese market. AI-
enabled shoe marketing strategies are compelled to interact with consumers via Douyin and
Tiktok, as well as Facebook short video, in order to produce efficient communication.
II.3.4 End User

Figure 1. Primary and secondary target customer

II.3.5 Persona
Customer insight: “Traveling and vlogging is my full - time job, but it often drains me
out as I have to go for long walks to explore the places I visit. Also hiring an
assistance to carry out my stuff seems to be too much to afford”
 Figure 2. Customer persona
II.3.6 TAM (Total Addressable Market)
Top-Down TAM
- The number of end users who fit our End User Profile: 10,000 people
- The revenue per end user: $700
- Multiplying the revenue per end user by the number of end users: 10,000 x 700 = 7,000,000
TAM
Bottom-Up TAM
- Multiply the average sales price by the number of current customers: $2000 x 1,000=
2,000,000 (ACV)
- Multiply our ACV by the total number of customers: $2,000,000 x 10,000 = 20B$

III. Marketing strategies

III.1 Strategic focus and positioning
AI - enabled shoes endeavors to maintain its strategic emphasis on expanding product
recognition and to be the futuristic vision of the footwear industry in China.
III.2 Objectives
 To raise the product awareness by 30% nationally and 20% globally in the next year
 To cut marketing costs by 20% by implementing cost-cutting measures across the
board, with an emphasis on short video platforms.
 To grow sales by 30% over the next five years and to be able to increase sales of other
products in the future
 To increase product visibility by 40% through merchandising and collaborations with
important actors in the footwear industry, as well as being displayed in hypermarkets.
III.3 Marketing mix
III.3.1 Product
AI - enabled shoes are smart shoes that include an automatic roller (visible only when
controlled via the app) and sensors for monitoring exercise performance.

Figure 3. AI – Enabled shoes

Key features:
 Material: High quality plastic and rubber
 Function: Automatic roller being controlled through app; 180 hours of usage
to recharge; being to keep track with fitness performance through app
 The modular components and the roller are swappable, which can return for
repair or upgrade
 Long product lifetime

To minimize shipping costs, the material will be provided by local suppliers.

Furthermore, thanks to China's large population, the expense of manufacturing and
labor has decreased. An efficient process will also guarantee the product's high quality
and technological application.
Experts in the information technology sector will be hired to develop an app that
meets the needs of customers and integrates well with the product. Not to mention,
several tests with the app will be conducted before putting it into actual use and
selling it to customers. Because the app primarily determines the value of the product,
it is critical to concentrate on creating the most comprehensive app.

Product core:
 Service core: We must provide excellent customer service as a new launch.
All social media networks we approach will have a consumer service to
quickly assist clients. We also offer 24/7 automatic live chat on our website
and app to make things easier for clients and the company. Since customers
may doubt AI-enabled shoes' efficiency, we offer refund and warranty
policies. Installment payments allow anyone to try the goods without financial
risk, expanding our reach. We'll also set up displays in supreme shoe stores
and hypermalls to help folks try out the products. Our software automatically
evaluates a product return.
  User experience: Focus on personalizing through collecting consumer data to
analyze trends, preferences, needs, and wants in order to provide tailored
services and products to fit their specific requirements.

III.3.2 Price

Because the technology of sensors that can produce fitness performance and an
automatic roller has already been implemented, the cost of these technologies will be
reduced compared to new technologies. Furthermore, improvements to the app will be
made in order to provide the finest experience for customers. Due to these concerns,
the price of the AI - enabled shoes will be around $2000 (without taxes). We believe
that this price is reasonable for first introducing our smart shoes to customers,
allowing us to reach a bigger audience. Instead of generating income during the first
year, we intend to improve and upgrade our product in order to maximize customer
experience. The expected income per pair of shoes will be around $700, which will be
used to cover the costs of manufacturing, marketing, labor, and other expenses. The
remainder will be used to enhance quality.

III.3.3 Place
Ai - enabled shoes will be sold and promoted in big cities of China at the start. We
intend to display the product in malls, supermarkets, and hypermarkets in Beijing and
Shanghai in order to increase product recognition and awareness. These premium
locations allow us to create a product image of luxurious and high - tech.
Furthermore, to increase the exclusivity of the goods, AI-enabled shoes are only sold
on the website and app, in order to increase website traffic and visits on social media
platforms. Merchandising is another method we propose for increasing product
awareness.

III.3.4 Promotion

In order to promote AI - enabled shoes, several marketing strategies have been

approached. Companies construct their advertising tactics in accordance with the
modern marketing approach in order to meet the desires, needs, and requests of their
consumers. (Khotimah, 2017) As a result, there are two types of marketing have been
proposed, gamification marketing and digital marketing,

III.3.4.1 The application of game design principles to non-game environments is

referred to as gamification marketing. (Deterding et al., 2014) Flow is an emotional
state in which an individual is entirely engaged in a sensation of focus, invigorated,
and completely involved when completing an activity, according to flow theoryGame
mechanic:
Key hook “Shoes of the Soldiers”

Rule Every day, players must catch various shoe boxes in order to unbox new types of
s shoes. In terms of price, each variety will be valued differently. The shoes could
then be converted into tokens. The more shoe boxes you can tap, the more shoes
you can catch, the more tokens you can earn.
 This activity will be done by any activity from walking. Moreover, the app does not
require users to purchase AI - enabled shoes to play. Any player is welcome.
The tokens can then be used to convert into discounts. For example:
1.000.000 tokens = 10% discount for each AI - enabled shoe being purchased
400.000.000 tokens = 50% discount for each AI - enabled shoe being purchased

Rank Customers can see the update and ranking every week in the part "Ranking this
week." When a player's rank is changed, this will frequently produce a notification.
This reminds customers to constantly engage in the game and unconsciously
recognize AI - enabled shoe products.

Goal Trigger customers to download the app and interact with AI - enabled shoe
promotions like Ads. Moreover, this urges users to recommend with friends, which
leads to the increase in product recognition.

Figure 4. Shoes of the Soldiers game

III.3.4.2 Our strategic approach for AI - enabled shoes is social media marketing,
which mainly targets short video platforms such as Tiktok.
TikTok is an audio-visual social media website that allows users to view both visuals
(pictures) and music. (sound). TikTok is commonly used to make short movies and
includes interesting features such as filters, music, and so on. (Hurley, 2022) Anadol
et al. (2020) discovered that the majority of TikTok users are regular people who use
the app to either disseminate material with their social network or manage content
made by others.
We use Influencer Marketing in our initiatives to communicate with clients via
Tiktok. It should be recognized that followers actively contribute to the building and
legitimization of influencer identities by following, engaging with, defending, and
supporting them (Lou et al., 2019). (Tafesse and Wood, 2021). Travis Scott, a well-
known American rapper and sneakerhead, will market our AI-enabled shoes in this
case. Content promotion could include evaluations, guidelines, practical
applications,or outfit construction.

Figure 5. Travis Scott Tiktok video AI – Enabled Shoes promotion

Furthermore, we want to spark heated debate about these new inventions. In order to
achieve this, it is an urge for a contagious and emotional message to be involved. For
example, "Are AI-enabled shoes really safe in automatically transporting you?" or
"Close my eyes on the way to school by using AI-enabled shoes." We want to elicit as
 many ethical concerns from users as feasible in order to increase and reinforce their
trust in return. We have more opportunities to discuss these issues this way.

Figure 6. Generating debate issues around AI – Enabled shoes

In order to help boost the brand awareness through Tiktok, we also capitalize on
Facebook and Instagram to interact with customers. We will create a short video as a
TVC in the first launch of social media accounts.

IV. Critical analysis

Drivers Restraints Opportunities

- Health consciousness: - Inability to pay due to - Technology improvement

As Chinese customers place a
high importance on maintaining
and improving health
consciousness (Michaelidou &
Hassan, 2008), numerous
economic crisis as the In addition, the combination
consequence of post of intelligent technology and
Covid 19 effects health monitoring devices
Some of the major has increased the rate of
challenges that are likely global adoption of fitness
 individuals have adopted
rigorous training and fitness
regimens. As a result, shoe sales
have increased around the
world. Obviously, this trend
contributes to the expansion of
the global smart shoes market.
- Growing interest in smart
wearables
Growing acceptance of
technology and demand for
smart wearables are the factors
propelling the expansion of the
smart shoe market.
to impede the growth of wearables. Future market
the global smart shoes expansion is also anticipated
market in the years to to be bolstered by
come include a lack of technological advances
technological maturity, intended at enhancing the
high prices, alternatives, efficacy of smart shoes.
and continuous product
innovation from different
competitors.

V. Conclusion
To summarize, an AI-enabled shoe business proposal was created in order to create an
innovation that incorporates both functional and smart applications of shoes, such as
increasing comfort and offering well-protection, with fashionable design, in addition
to monitoring athletic performance and providing personalized feedback. Based on all
of the research, An - enabled shoes have the potential to enter the smart shoe industry.
Two promotional tactics have also been implemented in order to get the product in
front of the right clients.

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