Develop a Services Marketing Plan of Fitness First - Research Paper Example

SERVICE MARKETING PLAN Fitness First - Singapore Contents EXECUTIVE SUMMARY 2 INTRODUCTION TO FITNESS FIRST 3 Fitness First in Singapore 4 SITUATION ANALYSIS 5 External Environment 5 Internal Environment 6 Fitness First on the Goods/Services Continuum 7 Service Characteristics 7 Service Elements 8 CUSTOMER ANALYSIS 9 Consumers’ Profile 9 Perceived Quality and Perceived Risk 10 Service Duration and Consumer Involvement 10 SERVICE PRODUCT ANALYSIS 10 SERVICE PROVIDER ANALYSIS 12 SERVQUAL Dimensions 12 Possible Sources Of Conflict 13 CURRENT PRICING STRATEGIES 14 CURRENT PROMOTIONAL STRATEGIES 15 SUPPLY AND DEMAND ANALYSIS 17 CUSTOMER SATISFACTION AND COMPANY’S CUSTOMER RETENTION EFFORTS 17 PROPOSED MARKETING STRATEGY FOR FITNESS FIRST SG 18 Products / Services 18 Price 18 Promotion 20 Placement 20 REFERENCES 21 EXECUTIVE SUMMARY This paper analyzes the marketing strategy of service provider company named Fitness First- Singapore and proposed a new service marketing plan so that marketing strategies can be improved with in turn attract more consumers, help company build competitive advantage and hence ultimately enhance profits. Starting from situation analysis in which internal and external environments are analyzed this paper look into the current marketing, pricing and physical evidence strategies of the company and after identifying the gaps suggest a new marketing plan which is well justified by giving proper explanation for the suggested amendments in each of the element of the marketing mix. Following this proposed plan Fitness First can get itself better exposed in the face of the competition and hence widens it customer base. INTRODUCTION TO FITNESS FIRST With 435 clubs and over a million members, Fitness First is reputed to be the largest health and fitness club in the world. The successful journey of Fitness First began in 1993 in the humble surroundings of Bournemouth where it was launched as a health and fitness club1. Today it has more than 80 clubs in UK and has expanded its business in 14 other countries of the world.2 The well trained and dedicated staff of personal trainers and gym and fitness instructors provide outstanding services that have positively influenced the lives of the members of the clubs the world over. ‘Fitness First’ works with the following mission; “To be famous for making the world a fitter place; likeminded members and likeminded staff work together to make that difference”.3 Top 10 essentials guiding the working of Fitness First and hence present values of Fitness First are depicted in the below presented figure. Figure I – Top Ten Essentials of Fitness First4 Fitness First in Singapore Fitness First has set up 12 fitness clubs in Singapore. These clubs are located at places from where they can be easily accessed by the members and provide services 7 days a week from morning till night. Fitness First has gone an extra mile to ensure the safety of its members as entry is only allowed to members and that too through personalized membership cards. Although all clubs are exclusive with modern amenities some can be categorized as state of the art. Although facilities vary from club to club, generally members can expect helpful and friendly front desk service, latest exercise equipment, complimentary workout attire, free headphones, shoe locker rental, lounge and juice bar, steam room and sauna. To make workout more interesting there is a cardio theatre where members can enjoy movies , music or news coverage of their choice while exercising. The members can also avail free DVD and VCD rental; the members can rent a movie for 48 hours from the rental shop by showing their Fitness First membership card5. SITUATION ANALYSIS External Environment Singapore is one of the few countries having an extremely business friendly environment and has thus attracted quite a number of multinational organizations. Singapore has more than 7,000 multinational corporations and the number is expected to increase because of the excellent and profitable environment of the place. The SLEPT (Social, Legal, Economic, Political and Technological) analysis shows that Singapore has the potential of becoming Asia’s services hub. The Social and Legal analysis indicate that the government of Singapore is committed to create a business friendly environment.6 The government has setup many organizations that help in the establishment and development of businesses. Although the population comprises of people from diverse cultures and background, the country is politically stable with a strong judicial system.7 The open and corruption free market of Singapore has contributed significantly towards its economic growth. Being an open market means it relies heavily on foreign investment and trade.8 The GDP has been growing consistently and in 2011 it grew by 4.9%.9 Technological growth in Singapore has been massive too with the internet becoming a household name. The social factor also includes the pattern of behavior and lifestyle in Singapore; the government of Singapore is greatly concerned about the rising obesity and health problems in the country. Through awareness campaigns in schools and workplaces and through the media the government is trying to get the people choose a better and a healthier diet and to exercise regularly.10 Over the years several gyms have been set up in Singapore some are managed by locals and some are foreign fitness clubs. The aim of both is the same; to bring about a positive change in the lives of the people. As most adults do not get time due to workload, the gyms and fitness clubs operate for longer hours throughout the week. Many people have become aware of the health problems due to obesity and lack of physical activities and are now joining fitness clubs. Internal Environment This section analyzes strengths and weaknesses of Fitness First. The first strength is the reputation of the Fitness First around the world. The Fitness First has established itself as a reliable name in the world of health and fitness clubs. Second strength is the environment offered by the Fitness First; it provides a clean, secure, friendly and a relaxing environment where people can tackle various health issues such as being overweight. Third the club has easily accessible locations; in all there are 12 Fitness First clubs in Singapore with flexible working hours for the convenience of the members. Fourth is the variety in fitness training programmes offered by the Fitness First; members of the club can choose from a wide array of fitness programs designed for group exercises or get one exclusively tailored for their needs. Fifth is the staff which is highly skilled and experienced and provides useful guidance to the members. Finally the club has keen promotional strategy which is good as it brings business to the company; aspects of promotion which attracts consumers are premium membership and that those having this membership can avail the services at any Fitness First Clubs in Singapore. Nevertheless there are weaknesses as well which should be catered for; for example, while the club promotes its programs heavily it should be noted that not all services are provided in all clubs. Second, the members complain that the membership fee is high and that the club gets too crowded at peak hours. It is also difficult to end the contract if the member does not get the time to avail the facilities at the club. Finally promotional activities targeted towards hard sell sometimes pose bad impact on company’s repute for example when people receive calls from the company to join Fitness First while they are extremely busy in their chores, they gets irritated and think it invasion of their privacy and comfort. Fitness First on the Goods/Services Continuum Degree of interaction between the customer and organization decides the location of a business offering on goods/services continuum.11 Williams and Buswell exemplified fitness services as services where the interaction between client and personal fitness trainer is maximum hence it lays farther in the goods/services continuum.12 However, given the fact that it is not only the services of trainer rather there are also fitness machines which are involved in the whole process of service provision, therefore it can be said that tangible aspects are also there. Hence fitness services cannot be classified as pure services. Given this explanation, goods/services continuum for fitness and gym services as offered by Fitness First can be presented as follows; Figure II – Goods/Services Continuum for Fitness First Service Characteristics This section presents services offered by Fitness First in terms of intangibility, heterogeneity, perishability and inseparability. Blythe and Zimmerman while citing Kotler (2003) explained different levels of intangibility as those that are purely tangible, then there are tangible goods with added services, then hybrid where portion of goods and services is balanced, followed by a category where the major portion is services offered through supporting goods whereas lastly it is pure services.13 ‘Fitness First’ falls under the category where the major portion is services offered through supporting goods hence the element of intangibility is there but to the extent fitness machines are involved. Heterogeneity means inconsistency in service standards14 which can be due to attitude and behavior of service provider or service quality / facilities may be variable in different units. For Fitness First element of heterogeneity in service provision is high due to the fact that in different Fitness First clubs different facilities are available, for instance some clubs have swimming pools whereas other do not have; therefore element of heterogeneity is regarded as high for Fitness First. Perishability means services are perishable and they cannot be stored for future use. Chelladurai quoted the example of fitness consultant who cannot store his services and offer it when customer arrives and hence for the provision of services fitness trainer should be present to offer the services when customer arrives15. This also shows that services are inseparable and its production and consumption cannot be separated. However, to some extent Fitness First membership has overcome this perishability and inseparability issues and those who are members of the club can avail services (like use of facilities, machines etc.) even if the trainer is unavailable for any reason. But still for regular provision of fitness services it cannot be offered in the absence of either party th trainer or the customer. Service Elements Offering that satisfies the main need of the consumer is core whereas supporting products/services that comes along with the main offering depicts the peripheral elements.16 These peripheral elements are discretional but in some cases they are important or even compulsory because their presence is vital to the provision of core services.17 Distinguishing the core and peripheral elements of the services offered by Fitness First it can be said that fitness training is the core services offered by the company and the fitness machine and other facilities available at the clubs are peripheral but compulsory to get access to the core services. Besides the core and peripheral services Fitness First also provide bundle offers where there are different packages for instance ‘lose it weight loss program’ and ‘body first’ program are the packages having a range of specified services which can only be availed by those registering for these programs. Other than this there are several other services offered to the customers like free DVD, Cardio Theater etc. CUSTOMER ANALYSIS Consumers’ Profile In this day and age the “brand” or the “image” counts a lot. People are becoming image conscious which explains the explosive growth of beauty salons and health and fitness clubs. Most of the people who join the fitness clubs are young; however middle aged people are also seen working out in the fitness clubs. Most of the people joining Fitness First come from high income bracket as the fee structure of the club is high as compared to others. Although a fitness club also serves as a place for socializing, the members of the Fitness First are quite keen upon achieving their target; weight loss. People also join Fitness First to regain the strength of their bodies; for instance people involved in accidents often lose strength in certain parts of their bodies. The Fitness First has devised programs through which the strength can be regained. Similarly after child birth the body losses its tone which can be regained by working out at Fitness First. In short the club helps the people to improve the image of their bodies which in turn has a positive effect on their mental health. Hence there is a wide range of consumers coming to this club. Perceived Quality and Perceived Risk A large number of consumers coming to the club show that people think its services reliable and trustworthy. They know if they are paying high they will get quality services in return. However there are some risks associated with the services as well; there are chances that a person may not lose weight at all but this is a rare occurrence and happens under specific medical conditions only, for instance thyroid problem. Another risk factor is that if a person has a heart condition, he/she may die during exercising. Service Duration and Consumer Involvement Almost all of the members of the club are satisfied with the services and involved keenly with the work outs. The club charges its members according to the facilities used and credit card is the most popular method of payment. The payment is done monthly and the club also charges a onetime joining fee. There are no long term contracts unless clients demand for it and the member can leave when he wants or get the membership frozen if he/she does not intend to use the services for sometime. However, there are some technical things in deciding the service duration and contracts which client needs to understand otherwise they may think Fitness First has not done fair when it comes to price because there are packages in which client has to pay some extra charges if they opt for early membership termination. SERVICE PRODUCT ANALYSIS “Physical Evidence is a means of providing tangible physical clues for a service which is largely intangible”.18 As explained above, the services offered by Fitness First is mostly intangible having the major characteristics of services i.e. inseparability, heterogeneity etc. however physical evidence is provided in the form of environment of the club and fitness machines and other physical clues. Research shows that physical evidence is important to re-inform clients about the services over time.19 At Fitness First the role of physical evidence is very important because it is important to retain attention of clients and is a major part of service experience received by the members of the club. To enhance this experience other amenities and provisions add up to it. The Fitness First Clubs are located at easily accessible places and are open from early morning to late night so that members can avail the facilities at the time which suits them the best. With so many fitness clubs around the block, it is but natural for those interested in joining to find out about the facility and its services first. Fitness First offers a unique opportunity in the form of a free trial for visitors to familiarize themselves with the environment and working of the club; this is a way to reinforce the environment which is promoted via different media. The interested person can download a free gym pass of the most convenient location and avail the fitness services offered free of cost. This helps the interested person decide whether Fitness First is worth joining or not and usually the decision is in the club’s favor because of the strong role physical evidence plays during the free trial period. Hence the overall servicescape offered by Fitness First adds to the cognitive and affective responses of the consumers. Servicescape “is the total environment in which a service is experienced”20 and hence the overall servicescape reinforce the physical evidence too. In the club the members can enroll for group exercises or personal training whatever they prefer. The duration of the group class is around 60 minutes and the members can choose from 470 classes (from newbie to hard core) according to their age or abilities. Those members who require undivided attention of the instructor can join the Personal Training program where the instructor especially designs a fitness plan for the member. These offers too enhance the experience of consumers in the servicesape. To enhance consumers’ experience further, Fitness First allows enhanced social experience where the group classes are not only a great place to achieve fitness goals but also to make new friends. Members are encouraged to bring a friend to the gym every Friday so that the two can workout together. The gym services are complimentary for the friend; this enhances affective responses of the consumers. Staff at Fitness First is also very friendly and adds to the physical evidence. They behave well with the customers and are supportive enough to guide them through any issues they may face during the service experience. SERVICE PROVIDER ANALYSIS The staff at the Fitness First helps the member set achievable weight loss goals and with the help of exercises help them achieve those goals. The experienced and skilled staff is also aware of the fact that each individual responds differently, therefore the staff also chalks out a diet plan which the members must follow to lose weight. Different fitness plans have been designed for men and women and the members are also instructed how to maintain weight once the desired weight is achieved. The aim of Fitness First is not restricted to help the members lose weight but it is also committed to bring about positive changes in the lives of the people and the major role in achieving the goals is played by staff of Fitness First. SERVQUAL Dimensions The SERVQUAL classifies service along five dimensions namely reliability, assurance, empathy responsive and tangibles. Reliability is defined as the ability of the organization to provide the promised services. A measure of helpful and prompt services by an organization is termed as responsiveness while assurance is the ability of the organization to produce trust and confidence among users. These factors are also a measure of how helpful and knowledgeable are the service providers of an organization. Empathy is the degree to which service is thought to be personalized and caring while the term tangibles is used to describe the professional appearance of the personnel, the physical facilities and the equipment.21 The staff at Fitness First is sympathetic and caring; the trainers understand that people who come here are often teased and upset about their weight issues. The staff motivates them to use the facilities of the center; the audio visual facilities let the members enjoy working out instead of making exercising an ordeal. The staff also helps people to set realistic goals that can be easily achieved. However since the services are heterogeneous and each club of Fitness First has different staff there are comments / consumer reviews that at times services are not much scripted and the front line staff needs to be trained so that they can become more knowledgeable and behave in a more friendly manner. Fitness First claims that only dedicated people with exceptional skills are recruited as staff at Fitness First. The positive attitude and dedication of the staff makes a good impression on the members. Weight loss or any other reason for which people join the fitness club requires a sympathetic and encouraging attitude. The training imparted at Fitness First is also result oriented and committed to bring about positive changes in the lives of the members. A positive and pleasant attitude of the staff plays an important part in its success. However, as mentioned above as per consumers’ opinion staff trainings should be further emphasized to achieve even better results. Possible Sources Of Conflict Like in every business there are some sources which might cause conflicts that may affect the service providers’ ability to do their jobs well. In Fitness First, the club gets overcrowded in the evenings and so the trainers cannot give much attention to each member especially those in a group. Each member demands personal attention which is impossible during peak hours. Lack of space, time and attention leaves members frustrated and they complain about employees which in turn de-motivates them. Hence these should be catered for properly to maintain the image imparted by the club via media / advertisements. Moreover as emotional labor has become a part of every job and in this case too where the consumers come with big expectations, emotional labor does exist. The trainers use whole range of emotional labor strategies to help the members achieve their desired results. Overall, the staff is well trained and competent and provides guidance as per the needs of the member. The staff is professional, motivated and sympathetic and guides the members well as they help the members in setting goals and achieving them. The management of Fitness First knows that only the best staff can deliver top quality services. For this reason only the best candidates are recruited and trained. The mindset of the staff is positive and result oriented and this leads to good results. Motivational coaching from employees has helped produce results however again proper strategies to give proper services to customers in peak hours is required to maintain service standards which is important to enhance members’ satisfaction. CURRENT PRICING STRATEGIES The price of services provided at Fitness First is higher as compared to its competitors, True Fitness and California Fitness. However instead of comparing the prices, those interested in joining a fitness club should personally visit the club and check the environment, facilities and equipment. True Fitness is the strongest competitor of Fitness First. True Fitness does not charge a sign up fee nor does it require an admin fee, however it does offer a 24 month contract and charges 2000 SGD. This contract includes the usage of all True Fitness gyms except its yoga studios. Fitness First charges a nominal amount of 16 SGD as a sign up fee and 100 SGD as admin fee while it charges a monthly fee of 142 SGD for a one year contract. It has 12 convenient locations however not all locations offer full services. The charges also depend upon the services one wants to avail. Businessmen and travelers can become a Passport member and avail the services of all 12 outlets of Singapore and the rest in the world. The members of Fitness First are expected to pay monthly fee while the package at True Fitness is prepaid. If a member wants to discontinue services at Fitness First then he/she has to pay an early termination fee of SGD 200 whereas there is no refund of fee if the services of True Fitness are discontinued.22 Following presents a brief cost/benefit analysis of the two competitors. Figure III - Cost/Benefit Analysis of Fitness First vs. True Fitness SG23 Hence this competitor comparison of price (cost/benefit) shows that both have quite different pricing strategies and suggestions regarding the same will be presented in new proposed marketing strategy. CURRENT PROMOTIONAL STRATEGIES Promotional mix is a part of marketing mix and there are different elements in a promotional mix. Promotion mix refers to the “combination of different kinds of promotion tools used by a firm to sell its products and services”.24 ‘Fitness First’ uses a mix of various media and modes to reach target audiences. To ensure proper coverage different promotional mix elements are blended together to communicate messages to the audiences; these messages revolve around communicating and promoting club membership, free trials, introduction of new fitness programmes and others to the target audience. There are programs offered by Fitness First which is suitable for every individual client and he/she can register for the specific program according to his/her need. There are different offers like Lose It weight loss program, personal training, freestyle training, bodyfirst, and group exercises which are promoted by the club. Another promotional tactic used by the club is to focus on the name of trainer and their achievements for example for its Lose It weight loss program the trainer is Dave Nuku who is “Regional Fitness Manager for Fitness First Asia” and is also “blue team trainer on The Biggest Loser Asia” and this is reinforced by Fitness First in its advertisements hence making current and potential clients realize the worth of joining the club. Besides, the use of words like lose weight quickly, safely and effectively is another way to focus on elements that are predominant in club’s services. Looking at the elements of promotional mix that are being used by the Fitness First, it can be said that it uses some of the elements of promotional mix. It advertises on TV and newspaper hence reaching audiences at large. It also uses sales promotion via the introduction of free trials of one to three days where the one who wish to join the club can avail the services of club free for three days to see if it is worth joining the club or not. However most of the time Fitness first is not doing personal selling or is not involved much in social responsibility initiatives to boost its publicity. Though the company is into reducing carbon footprint and energy management as corporate and social responsibility initiatives25, however this is not enough for the company of this scale in the face of today’s competitive world. Comparing cost with the benefit it can be said that since this is a company of huge scale and therefore cost invested in promoting its offerings to general public is justified with response it receive from the people who register with Fitness First due to the promotional efforts of the company. SUPPLY AND DEMAND ANALYSIS The reason behind the popularity of gyms like Fitness First in Singapore is the health consciousness created by the government and also media which has made people health conscious more than ever before. The life of the residents of Singapore is quite hectic and it is difficult for the people to take out time for gyms. However places like Fitness First offer flexible timings and facilities at convenient locations in order to encourage the people to join the fitness club. There are free trials for people and usually those who opt for these trials eventually join the facility as members. The certified instructors help people chalk out their weight loss plans or any other plans for which they have joined the fitness club. The members can ask either for an individual training or can join groups. Almost all Fitness First clubs are crowded in the evening. Owing to the increase in demand for fitness clubs and services offered by the club along with constant promotion of the same it is worth questioning that how Fitness First manages its demand vs. supply relationship. If the services offered by the club are popular among masses definitely its demand would be high and to cater for that demand Fitness First needs to make its services available. If the demand is high and Fitness First realizes the need to have more outlets going for this option could be a possibility or if amenities within the same clubs needs to be enhanced there is a possibility that by doing so supply can be increased to further manage the demand. CUSTOMER SATISFACTION AND COMPANY’S CUSTOMER RETENTION EFFORTS To enhance customer satisfaction and perceived value and to retain them for long in the face of tough competition in fitness industry in Singapore the Fitness First not only offer different packages and tailored programs but also come up with initiatives like complimentary services for a friend of the member on every Friday and so on. However, still if the perceived quality based on the customer level of satisfaction is judged based on the consumer reviews published on the internet about the services of Fitness First Singapore it can be seen that services needs improvement; front line staff needs to be more trained and friendly and pricing of the product should be improved. All these will be discussed in the proposed marketing strategy for Fitness First SG PROPOSED MARKETING STRATEGY FOR FITNESS FIRST SG Marketing mix consists of four P’s (Product, Price, Promotion and Placement) and this section will propose marketing strategy for Fitness First Singapore based on the analysis presented above. This plan is to be achieved within a period of 6 months to one year where goals which are easy to implement will have a short time frame whereas those requiring much investment and planning will have an adequate time frame for their achievement. Following presents recommendations for the club on each of the marketing mix element. Products / Services As can be seen in the good/service continuum and servicescape of Fitness First the role of physical evidence is much prominent and hence plays an important role in attracting and retaining customers; it is therefore recommended that physical evidence strategies should be strengthened. One of the elements in physical evidence is the social interaction of company staff with the customers which as per the customer reviews is not good enough therefore staff trainings are recommended along with revising compensation packages and recognition strategies of staff so that they feel more motivated towards their work. Another recommendation is to prepare a checklist to see which clubs offer which facilities and services and to try to make all services available at all clubs to maintain service standards. Yet another recommendation when it comes to services provision by Fitness First is to make uniform facilities available at the clubs so as to justify the price it charges. Price Before making statements about the price package of various fitness clubs, it is important to study the behavior of the people. In Singapore, people do not show consistency that is why most fitness clubs and gyms charge a lump sum amount which is usually a two year fee as is the case of True Fitness the main competitor of Fitness First. However there is no joining fee. Fitness First, on the other hand has a sign up fee (SGD 16) and an admin fee of 100 SGD besides monthly charges of SGD 142 which adds up to SGD 1820 per year. In addition if a member wants to leave the club, he/she will have to pay SGD 200 otherwise they will be charged SGD 142 every month. These things put off the potential customers who then head towards other fitness clubs that charge almost the same amount for two years. The management of Fitness First should waive the signup fee as sign up is free in almost all other fitness clubs. Also instead of an annual fee membership or bi-annual fee, it should offer tri monthly and bi-monthly memberships as none of the other follow this strategy and this will also attract consumers as they have to be bound with the company for a smaller period of time. It should also offer a discount to those who wish to continue after the tri-monthly or bi-annual membership is completed. Although Fitness First offers more facilities than other fitness clubs but the penalties put off the customers; it should work on a more attractive package that would suit the needs of the members as given below. Activity Fee Remarks Sign-up Free As this is the case with most of the competitors because customers too think it attractive Admin Fee 100 SGD This is also charged by others and is well justified and understood by customers too. Termination Fee / Penalties None This is because when customers know it earlier that they have to pay early membership termination they withdraw Tri-monthly and bi-monthly membership Pricing department will decide Instead of charging early termination Fitness First should work on bi-monthly or tri-monthly prepaid fees to attract consumers by avoiding long term contracts. Uniforms Available Offering value addition on same fee attracts people. Table I – New Pricing For Fitness First Promotion For the improvement of promotion element of marketing mix it is suggested that Fitness First should focus on integrated promotional mix. All the media used should focus on same message and consumers must be attracted towards the services. Focus should be placed on publicity element where Fitness first can take part in different events and sponsor different relevant activities to help grow its name. Another point which is discussed earlier is the risk factors which Fitness First must try to eliminate like risk of death during exercises which pose a bad name on the brand. To eliminate such risks Fitness First should ask those who wish to join it to produce a medical certificate and advertise the same to make people realize how concerned Fitness First is about the safety of its members. Placement Placement strategy is already good as Fitness First is available in 12 convenient locations but still it needs to be figured out if expansion option is available. This can be done more properly by conducting consumer research. This will help identify consumer convenient location i.e. if there are any other places where there is demand and supply can be made possible; this will make expansion decisions much easier. REFERENCES Adrian Payne and Malcolm McDonald, Marketing Planning for Services (New York: Routledge, 2012), 157. 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