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Marketing Strategy for Gym

3303 words (13 pages) Business Assignment

9th Nov 2020 Business Assignment Reference this

Tags: Business AssignmentsMarketing

A1. New Product and Services

In the modern world, obesity has become an epidemic and is rising in most part of western countries. It is particularly affecting the children and adolescents at a worrisome rate. For an adult, there are many healthy living and eating options that society promotes. But for the children and adolescents, nothing is available to promote their health and wellbeing. FitFuture of Queens, New York is a company that offers nutritional and fitness services to its adult clients. Among the services, most notable are a meal plan, weight control products, and exercise routine in the form of Zumba, Yoga, Pilates and Cardio Fusion. My proposal to the FitFuture is that they add nutritional and fitness services designed to cater to the children. FitFuture has an overseas branch at Luxembourg, Germany that is well known for its high percentage of the obese population, particularly children (Reilly & Dorosty, 1999). I want to add Yoga and Zumba classes designed for children and hire a pediatric nutritionist who will promote a healthy meal plan. This will create a new opportunity and environment where parents and their children both will be served for a healthy lifestyle.

A1a. Methods

FitFuture hired me to explore the feasibility of expanding their services to the Luxembourg location. To reach a conclusion, three different methods were used. All thee methods helped us to determine the need and best ways to implement the services in Luxembourg branch. Analyzing the internal data, conducting focus group, and administrating surveys, I came to the conclusion that the Luxembourg branch of FitFuture has great potential to address the childhood obesity problem.

To determine the specific need and market at Luxembourg, the first method used was the quantitative method of research. An analysis of the internal data of FitFuture reveals that many of their clients have children. Physically active children build their motor skill faster and strengthen immunity (Reilly & Dorosty, 1999). Parents will have the opportunity to bring their children when they come to fitness training. This will also enhance the parent-child bond by allowing quality time together.

Conducting focus groups was my second method of collecting data to analyze the need and market in Luxembourg branch. A series of the focus group was set up among the FitFuture clients who have children to determine if there is a need for these extended services catering the children. Data gathered during the discussion and interaction in the focus group reveals that all the participants support the idea of adding exercise and nutritional services directed towards children. The adult clients of FitFuture at  Luxembourg clearly expressed the need for these new services.

My third method was administering a survey. The survey with specific questions about the preferred day, time of services and modality was given to clients at FitFuture Luxembourg. The outcome analysis helped us to get into the detail of implementation.

A1b. Competitive Advantage

A SWOT analysis of FitFuture operation demonstrates that it has some clear advantage over its competitor. The main competitor is YMCA who offers exercise classes to both adult and children. But YMCA does not offer any nutritional services in any shape or form. FitFuture offers nutritional services to its clients based on their age. Food habit is one of the most important factors in healthy living. With both exercise and nutritional guidance in the package, FitFuture has a competitive edge over its rival in the local and global market.

A1c. Inherent Risks

Any new implementation comes with some challenges and risk. One of the risks that are associated with the implementation of these new services is the construction to expand the Luxembourg facility. Currently, the space available is not big enough to conduct classes for children. Either FitFuture Luxembourg has to find a new larger facility or it has to expand its existing facility to accommodate new children clientele. Either of these options can take months and will disrupt the operation. To minimize this time-related setback, I suggest that FitFutue head office work with Luxembourg branch official well in advance to collect real-estate related market data and work with a local real-estate agent to take an informed decision that will suit the new implementation optimally.

Dealing with children brings additional responsibility. The second risk associated with this new implementation is the potential risk of injuries. Yoga and Zumba exercise sometimes may cause injuries. The instructors of the classes should ask all the participants to exercise caution during the routine. FitFuture has a liability waiver form for adult clients. Prior to launching new services for the children, the facility manager must have every parent, with child participant sign a legally binding liability waiver form covering the child. This will protect FitFuture in any future lawsuit in case some unintended injury happens.

A2. Customer Relationship Management Software (CRM)

FitFuture needs CRM software specifically designed to cater to the need of its operation which will collect and manage data from its current and future customer and ultimately help drive growth.

MINDBODY is a CRM package available to effectively streamline operation in a small health care company like FitFuture. Among its many useful features, the most suitable for FitFuture is Membership Management. Membership Management will be very useful to consolidate all client data into one system and tracking history about clients. It also provides Payment Tracking, Payroll and Commission Tracking. Payment Tracking will help keep a good record of receipt and payment including membership receipt and dues. Payroll and Commission Tracking keep track of work hour, commotion earned and calculate staff pay rates. The reporting section of MINDBODY allows managers to create custom graph and chart on various aspect of the operation including customer behavior that helps strategize future marketing plan.

A2a. CRM Information

The CRM package MINDBODY will be used in collecting data on client information and behavior, customer satisfaction and, financial transaction. The report generated by using those data will guide the management to take the future decision on marketing and improving service quality to attract more clients. The client data will help management to decide what class to add more or what to eliminate. This will help to save cost and generating more revenue. By helping analyze customer satisfaction and engagement data MINDBODY will help management to take future marketing initiative to explore and to drive growth.

The feedback data from the client will help the management to improve the quality of service and customer satisfaction. This will help to retain an old customer and attract new clients. Adding new customer will increase the bottom-line of FitFuture.

A3. Distribution Channel

FitFuture will utilize a direct channel to market the two new services to its overseas client. By eliminating outside source to provide services to its clients, FitFuture will save money. In last decade technology has advanced immensely and a direct distribution utilizing the latest technology makes more sense for FitFuture to provide its services to its clients. In order to provide these services directly, FitFuture plans to bring their own experienced pediatric nutritionist from Queens, New York Headquarter to Luxembourg branch to start the new service on nutrition. For the fitness part, it will hire a certified Yoga and Zumba expert locally. FitFuture will use MINDBODY system Membership Self-Service feature to connect with clients through the internet. Customer will be able to access the class schedule and pre-book a class they want to attend.

A3a. Key Consideration

The FitFulure Luxembourg is part of its US operation. A key consideration for expanding the two new services to its overseas location is the environmental forces. Conducting an environmental examination of Luxembourg is the key to the success of this expansion.

Marketing is a very powerful tool to influence people's mind and it can be successfully used on specific demographic to influence the decision when there is underlying need. Continuing their services FitFuture need to consider the economic strength of Luxembourg by examining the income, living conditions, exchange rate, and national resources. In order to boost their economic status, FitFuture plans to hire child-oriented class instructors from Luxembourg.

Another key consideration for expanding FitFuture services is the sociocultural factors of the local environment they serve. Sociocultural factors play a major role in the way company market their product or services. Belief, cultural values of the region, family, education, and health of that society influence the marketing strategy. Therefore, bringing an experienced pediatric nutritionist from Queens, New York with knowledge of the social culture of Luxembourg will create a comfortable environment for the new clientele.

A3b. Global Supply Chain

FitFuture created a plan for implementing services for children into their organization. They found the space for the classes, hired a pediatric nutritionist and staff to conduct classes, and received the consent forms from the parents for starting the program at the Luxembourg branch. What can break this chain is that the client could not come. FitFuture is a service organization and its success depends on clients’ commitment to come to the classes. If the children do not want to go to the classes, it can compel the FitFuture organization to dissolve the services geared towards children.

Since FitFuture is a client-based company, it relies heavily on the attendance of clients. Without clients coming in, FitFuture will lose revenue completely because they have no other services or products that do not depend on clients coming in. In addition, the company depends on parents having the time to take their children with them to their classes and nutritional consultant. If they cannot find the time, neither the parent nor the child will attend. Then, this will cause FitFuture to lose their entire parent client base. If this continues on, the final impact will be the failure of the entire Luxembourg branch and will need to be closed.

A4. Major Pricing Strategy

Bundle pricing is the pricing strategy that would best align with the services that FitFuture want to add to their Luxembourg branch. The strategy of bundle pricing will be used as a stepping stone in introducing the new services. To attract clients, FitFuture will bundle a nutritional service with two exercise sessions for the price of one. FitFuture originally used a cost-based pricing plan for their services. If they pay the nutritionist $25 an hour, and he/she works an average of 6 hours a day, with 2 clients per hour, 4 days a week, it will cost them $600 weekly. Therefore, if we charge $60 per client, then we will make a 20% profit. In regard to the exercise classes, we will pay the instructor $15 an hour, 2 classes per day, 7 days a week. If there is an average of 10 clients per class and each pays $10, we will make 166% profit for the exercise classes geared towards children, bases on two instructors working a total of 5 hours daily. If the client chooses not to bundle, it will cost them an average of $65 for nutritional services and two exercise classes. Bundling the services will save the first-time client $10. If the client wants to continue their classes afterward they have an option of purchasing 3 classes for the price of 2. Bundle pricing assists in client satisfaction and helps promote client loyalty and improve customer retention.

A4a. Costs Associated with Development and Launch

Since FitFuture already offers these services to their adult clients, the cost was easily determined to the development and launch of the expansion of services towards the children. Expanding the facility will be the first step in the development of services. I would estimate this around $25,000. The next expense is hiring the right staff. The pediatric nutritionist's estimated cost will be $38,000 a year part-time (salary $31,000 and other cost $7,000), and the facilitator of exercise classes estimated the cost will be $75 per class they teach. The next expenses would be purchasing promotional products (pens, bottles, fitness trackers) to attract clients when participating in outreach events like Health Fairs and Health Expos. I estimate this to cost around $25,000. I would also participate in local school events, such as school health fairs, which will give me direct access to parents and giving them the information on what services we provide and how it can benefit them as a family. I expect it to cost around $6,000 yearly. The next step is promoting  services through social media. I am expecting it to cost around $15,000. The final step will be used is the distribution channel. Using FitFuture’s website for direct contact with their clients will help to get the word around about the new services throughout the community FitFuture serves.

A4b. Consumer Acceptance of Price

FitFuture determined the price of the services from the client’s feedback during the research stage of finding the need for these services. Based on the demographic of the location at Luxembourg branch, offering the services in a bundle purchase, which consists of a nutritional session and 2 exercise classes for the price of only the nutritional session, $60, assisted in client satisfaction and the success in the implementation of the expanded services to the Luxembourg facility.

A4c. Competitor Price

The average cost for a family monthly membership fee is $110 at the YMCA. YMCA also has a joiner's fee of $75. Families could pay for the monthly membership and so often commit to going to the facility or have the option of free will. For joining  FitFuture, there is no fee, only paying for the services they want. They have an option to pay for a nutritional session and get two free classes with the bundling package of $60 or pay for just the classes, which are $10 each. Instead of the monthly membership fee, clients have the option to choose which class they want to attend and pay for it on the day they want to go.

A5. Promotion Strategy

To promote a healthy lifestyle for families, the promotional strategies that FitFuture will use are social media, product giveaways, and consumer referral incentive programs. Their choice of social media outlets is Facebook and Instagram. The nutritionist will give free samples to both the children and their parents to see if they like the recipes included in their meal plan. In addition, if a customer refers their friends or relative to FitFuture, they will receive a two for the price of one bundle, in which they bring their friend and they both go to the exercise class for $10.

A5a. Mass and Social Media Channel

FitFuture will use social media (both Facebook and Instagram), radio, local school newspapers, and the FitFuture website.

A5ai. Justification of Media Channel

Based on FitFuture’s target audience, parents with children 6 and older, FitFuture chose to promote their services through Facebook and Instagram. Studies have shown that parents turn to social media for parenting-related information and social support (Duggan, Lenhart, Lampe, & Ellison, 2015). The service that FitFuture is offering to parents will benefit them in creating a healthy lifestyle for the whole family. Having a commercial on radio channels will broaden the FitFuture’s outreach services in capturing working parents throughout the day, during their commute to and from work every day.  Rajar Audio measurement studies show that the peak of active radio listeners in their cars is between 7:00 am and 8:00 am and 5:00 pm and 7:00 pm (Rajar Audio measurement, 2017). FitFuture, in promoting their services in school newspapers/newsletters, will make the parents aware of these services and how they can help their child. Studies show that 85% of people say that seeing a brand in their newspaper gives them the confidence that is right for them (Newswork, 2015). Having the FitFuture promote their extended services on their website assists them in promoting to their current client base which saves money in marketing and the retention of current clients with children. Based on the data received from the FitFuture’s internal data source, statistics show that 85% of the women with children that visit the Luxembourg branch for exercise and nutritional services visit the FitFuture’s website prior to their visit.

A5b. Sales Promotion Activities

FitFuture will offer coupons for new clients joining the organization. If they purchase a beginner bundle service, they will receive a 10% discount. This will create trust in the client and make them think of continuing. If the client decides to continue in the services, a 5% discount will be given on the second purchase. This will encourage them to continue with FitFuture. After their second session, they will receive a punch card. If a client takes 10 classes or 10 punches on their card, the 11th class is free. In regards to the nutritional services, some clients may feel wary about eating differently with a new meal plan. The free samples given to the entire family will encourage them to eat healthier and show the clients that healthy can be tasty too. After the free samples, if they decide to buy any of the meals pre-prepared, they will receive another punch card that gives them 10th meal free.

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