Marketing Strategy for Next Generation Gym in the UK - Case Study Example

? Marketing Strategy for Next Generation Gym, UK of the of the Marketing Strategy for Next Generation Gym, UK Introduction The desire to be the best we can does pervade our senses from time to time. How can we resist it, when the advertising industry is constantly booming out messages telling us that we need to conform to a certain style, seek to enjoy a certain lifestyle and meet a certain body type that is desirable by the opposite sex. Even if we are married and settled down, working at the office also forces us to meet certain social norms about dress code, etiquette, office procedures and the like. Everyone likes to be thought of as young and virile, as ageism spells death and lack of promotional opportunities. It is a combination of all these factors that lead young people and professionals to join gyms and sports facilities all over the world, and the UK is no exception. In fact the trend for a healthier and happier lifestyle is catching on here. Being in good shape and eating a healthy diet not only help get us noticed and appreciated more at the office and on the street, but also make us irresistible to the opposite sex (Adcock et al, 2001, 17). Most of all, it makes us happy. This paper will look at the comparatively new concept of pay as you go gyms in the UK, with particular reference to Next Generation Club Gyms, a business registered in Hertfordshire, UK. It also has a branch in Swindon. Pay As You Go, a New Concept in the Sports Industry In fact, Next Generation Club Gyms have been the subject of quite rapt attention by sport enthusiasts and marketers alike, since it has introduced the concept of pay as you go in the UK. Similar in concept to schemes for mobile phones, this new innovation has made it easier for people who would like to get into shape or practice some sort of sport activity not on a regular but on an infrequent basis, when they get the time. Of course, it is always better to follow a regular schedule when you can but many of us have varying responsibilities at different times of the day, week or month which does not give us the opportunity to live a really scheduled life. For example, a salesman who has to travel to customers for offers and closing deals can hardly know in advance where he will be at a certain time of the day or how long the next sales call will take. One can similarly get stuck with a last minute assignment at the office, or have to stay an extra shift because somebody is ill or cannot make it. For these individuals, pay as you go certainly makes sense (Perner, Pricing, 2011). When you come to think of it, pay as you go also makes sense for lazy individuals who are not self determined enough to follow a regular schedule. So the idea certainly has merit for most of us. Pay as you go is not only cheaper; you can book a time slot in advance and ensure availability of facilities and equipment that lets you exercise, swim or play tennis at ease and without waiting in line for people to clear out before you get a chance. The concept caught on in the USA some time ago but has only been recently introduced in the UK (Garvin, 1988, 20). Available Facilities and Activities Presently the activities available at Next Generation Gym Club in Swindon are swimming, exercise, racquets and relaxing opportunities. Swimming allows you to relax after a hard day’s work, play casually in the pool or if you are more competitive, even learn some new strokes and increase your lap speed. There are swimming lessons for kids and grownups as well, including aqua aerobics for anyone who is interested. Training for body strength and flexibility include Body Blast, Body Pump, Body Pump Express, Pilates, Spin, Yoga and Boxercise, all scheduled at different times. A monthly schedule is drawn up in advance. Facilities for NG Kids include rugby, basketball, soft play activities, make and create, karate, teen gym street dance academy and booking for parties. There are also squash, tennis and badminton facilities with professional coaching available. The cafe and menu bar offers a variety of healthy food options for breakfast, tea or lunch, from pastries to sandwiches to cereals, vegetables, yogurt and fresh fruit. There is also a function room that can be hired on half or full day basis for meetings etc (Next Generation Gym Website, 2011). To be sure, Next Generation Gyms also has a regular membership that gives the business its base earnings. Schools and offices can also hire facilities on group basis. PAYG bookings can start as low as ?5.00 for a session. Segmenting the Target Market On the question of targeting and segmenting a market, it is tempting to offer the same facilities to everyone. But experience has shown that it pays to classify the customer in terms of his or her needs. For example, if a person had a fear of water, it would be useless to try to sell him a swimming membership. On the other hand, a teenager who is slim and svelte would more likely be interested in dance or gymnastics rather than serious bodybuilding (Beech & Chadwick, 2007). The first task is to get the needs of the prospective customers on paper, and this would most likely be accomplished by taking a survey from school students, office workers or the general sports enthusiasts at clubs where all the facilities that Next Generation Gym offers are not available all at one place. It is suggested to target the following groups of customers, all with diverse needs: Segment Age Group Psychographics Lifestyle Young School Kids & Teenagers 7-22 Membership mostly decided by parents Typical school activity, eager to expend energy Young Adult Office Goers & Self Employed 22-35 Gainfully employed or looking for work; make own decisions to enroll Office to work, self or family responsibilities, but want to stay in shape too Middle Aged Executives & Professionals; Housewives 36-55 Want to stay in shape; issues of ageism Spend most time in office; exercise as time permits Retired Professionals; People Approaching Old Age 55 and above Take exercise to keep themselves agile; want to improve mobility and vitality Empty Nesters or taking care of self and grandkids; lots of spare time A closer look at the segmentation would show that a number of variables or distinguishing characteristics can be, and often are used in practice, to segment a market (Zeithaml et al, April 1988). The first to be looked at in terms of the PAYG facility would be lifestyle. The gym club would be targeting those people whose lifestyle was such that they only exercised irregularly and would therefore benefit most from booking for facilities and activities when the opportunity presented itself. The gym could also take a small fee per month to keep these people on the rolls. It has to keep afloat, and this fee would help offset the circumstance of it not being booked to capacity or even break even on any given day (Perner, Information Search and Decision Making, 2011). Although the gym has tried its best to strengthen its base income by offering memberships to schools and offices, offering professional training for different sports, renting out function room facilities for half and full day meetings and even started health food, snack and refreshment offerings for the sports enthusiasts, it is still open to losses if it does not get appreciable earnings on its PAYG scheme (Morris, 2009, 27; Zeithaml et al, 1990). The second factor is the age group, which is decided as those between 36 and 55 years old. They have the income but not the time to exercise regularly. They may also have some health issues due to a sedentary lifestyle and use exercise or other sport activities as a chance to de-stress from the pressures of work demands and office politics. In contrast, the young office goers or self employed professionals in the age bracket 22-35 would probably prefer a stable yearly membership with regular timings and an exercise schedule or activity regimen that keeps them in shape for work and play. They have just started with work and family responsibilities but want to stay in shape too. They are self conscious, fashionable and trendy and want to be desired and admired. They have healthy egos, are influenced by the latest happenings in fashion and design and use the Internet, Facebook and Twitter daily to communicate with friends and interest groups. They most likely are influenced by celebrities and local trend setters in the office and community (Ross, 2009). Consumer Profile for the Most Suitable Target Market for the PAYG Facility Regarding the consumer profile for the most suitable target market for the PAYG facility being offered, it is clear that the middle aged executives, self employed professionals and housewives would be the best to target for this scheme. These people have a busy life, with irregular work times and schedules not offering them a chance to start a regular exercise program with a timetable for progress. They just grab the opportunity when it presents itself. They feel guilty about exercising and know that a regular gym membership would be too expensive and not feasible. For them, the chance to avail the opportunity whenever they can is a godsend. They are plagued by office and home responsibilities, balancing both and having a not so good quality work-life balance. For them, PAYG at Next Generation would definitely be appreciated and useful. They have less time but the money to avail this opportunity to the fullest. Factors Influencing Consumers to Try the Gym Facilities and Activities The first thing is that the young office goers and self employed professionals or sport enthusiasts would want to use the gym facilities to stay in shape. They want to pursue a healthy lifestyle and not be plagued by diseases in middle age. They want to be active as they age and so a regular gym membership would be more feasible for them. They would most likely make friends with suitable partners or opponents in the same age group and socialize with them on weekends outside the gym as well (Perner, Attitudes, 2011). On the other hand, parents and schools can also use the regular or PAYG facility, depending on the time and cost factor. Sometimes schools or parents can be induced to enroll promising young students or their kids in the club because of lack of suitable facilities or professional training opportunities at school or college (Armstrong et al, 2009, 56). For the old retired seniors, one can have relaxing sessions, yoga classes or mobility training. These people have time on their hands but are losing their agility as they age. They would most probably also enjoy the chance of meeting up with others in their age group and discussing their life stories and other experiences while taking a sauna or relaxing at the restaurant (Perner, Group Influences, 2011). They can choose PAYG or regular membership depending on their health and income sustainability issues. If being sponsored by their children, PAYG would most probably be preferred to a regular membership. All the above segments would definitely have their reference or influence groups or personalities and that is also an important factor in taking memberships at the club (Drummond & Ensor, 2005, 66). Positioning Strategy for Next Generation Club Gym, UK In terms of designing a positioning strategy for Next Generation Club Gym in the UK market, I would think that PAYG is an idea whose time has come. It is a good and feasible alternative to annual memberships, which could be quite costly (Financial Times, 2011). At the higher end of the UK market are Gymbox, Aegis Training, The Place and the Third Space. Jubilee Hall and Central YMCA bring up the lower end. Next Generation would stand to gain some members from both higher and lower end groups, especially where crowds and long waiting times are a factor. Most memberships are never used in full anyway, and a person usually limits himself to one or two choice activities which he enjoys. In such circumstances, PAYG is an affordable and wise choice. Only the true sports enthusiast or professional sportsperson would go for full membership and he or she most likely makes use of some or all of the facilities nearly every day or every second day. Otherwise PAYG is definitely a preferred choice in these difficult times. References Adcock, D. Halborg, A. & Ross, C. (2001). Marketing: Principles & Practice, 4th edition, Pearson Education. Armstrong, G.; Kotler, P.; Harker, M. & Brennan, R. (2009). Marketing: An Introduction, 1st Edition, Pearson Education Ltd. England. Beech, J., & Chadwick, S., (2007). The Marketing of Sport, 1stEdition, Pearson Education Ltd. Essex. Drummond, G., & Ensor, J., (2005). Introduction to Marketing Concepts, 1st Edition, Butterworth-Heinemann. FT.com (2011). Retailers hit by drop in demand and rising prices. Accessed on 12 Dec 2011 at http://www.ft.com. Garvin D (1988). Managing Quality.The Free Press. Morris, L. (2009). Innovation need not be radical but it must meet a real need. 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