Strategic Marketing Plan for Avery Hill Gym - Report Example

Strategic marketing plan for a privately-owned Gym called Avery Hill Gym in Greenwich, London Contents Introduction and Mission ment 4 Current Market Position 5 Market Overview 6 Target Market 6 Marketing Audit 7 Strengths and Weaknesses 7 Opportunities and Threats (PESTEL Analysis) 8 Competitor Analysis 9 Key Issues and Opportunities 10 Objectives (Strategic Objectives-including the assumptions) 10 Revenues 10 Customer Base 11 Strategy 12 Brief Description of Strategy 12 Marketing objectives 13 Positioning Strategy and theme or statement 13 Branding Strategy 14 Product Strategy 14 Pricing Strategy 15 Distribution Strategy (Place) 15 Promotional Strategy 15 Services strategies 16 Resource Requirements and Budgets (Gantt chart) 16 Budgets 16 References 18 Appendix 20 Gantt chart 20 Introduction and Mission Statement Late President of United States once said that Physical fitness is not only one of the most important keys to a healthy body but is forms the basis of creative and dynamic intellectual activity. The above statement clearly shows the importance of physical fitness in daily lives of individuals. Thus maintaining sedentary lifestyle and having unhealthy eating habits is like doing injustice to oneself. Hence it is important to keep one physically fit, and this can be achieved not only by having a proper diet but one has to follow a proper exercise regime too .The importance of exercise and physical fitness which can be customized to specific requirements of both old and young has led to rise in importance and use of exercise equipments. The easy access to fitness centers and gyms highlights the importance of physical fitness. The Fitness Industry in United States of America has grown popularity. It has been found that the rate of obesity in USA has grown steadily from 1987 to 2007 and all the states except Colorado has one fifth of their population suffering from obesity. According to research over 72 million Americans are considered to be clinically obese. This has set the stage for new fitness centre industry to come up and expend rapidly. Membership in these centers rose throughout the 1990s and the enormous growth of fitness centers were seen in period of 2000s. At the beginning of the decade there were around 16,938 clubs but the number grew to 29,638 by 2008. This report will look at the marketing plan of a new gym centre which is to be opened in Greenwich, London. The name of the company is Avery Hill Gym. The company will offer exercise equipment, from leg presses to free weights to treadmills. It will have a range of other services like personal training, massages and classes in areas like yoga and aerobics. Hence good marketing is important in this filed to attract new customers. The Vision of the company is to achieve recognition as a quality service provider in health and fitness, so that everyone can stay healthy, following on the same lines the Mission of the company is to encourage the people of Greenwich to live healthy and to achieve fitness goals by providing quality services and facilities to every citizen of Greenwich (Harrison, 2003, Pp: 113-117). Current Market Position Product- The product in this study is the Gym which is coming up in the local market with a view to provide good fitness facilities to its customers in the city. Place- Avery Hill Gym has chosen its area to be in the small city of London called Greenwich where the population is very minimal of approximately 61000. Revenue Distribution of Avery Hill Gym for 2002 Particulars (in £) Percentage Total Revenue of Avery Hill Gym 24500 100% Revenue from Teenage Centre 6000 24% Revenue from Elite Centre 10000 41% Revenue from Yoga Centre 1000 4% Revenue from Adult Centre 7500 31% From the above table it can be found that in 2002 out of the total revenue earned the maximum revenue came from Elite Centre followed by Adult Centre. Thus Avery Hill Gym should look after the Elite Centre. Price- The price range offer availing the services from Avery Hill Gym are been kept at very reasonable rates so that it is able to attract huge number of customers. Promotion- The gym is been promoted in a huge way using various promotion platforms to reach the customers and help them get the message to be conveyed in the perfect way. Market Overview Gyms is an industry where in there is both capital and labor expenses and over the last decade the number of trainers and also the equipment’s has gone up in a huge numbers. A particular gym gets competitive advantage over the other mainly on the basis on these two points of equipment’s and trainers (Mankiw, and Taylor, 2008, Pp: 65-70). With the increasing changes in the culture of working environment people have moved more toward working more sitting in front of their systems than having physical work as a result of which lots of problems related to fitness in the people have come up in huge way in the last few decades, thus because of this people have looked to join more of fitness centers to keep a good health. The same condition is been seen even in the small place of Greenwich, with a population of around 61,000 people, the majority of population being in the age of young and working people along with the teens. There is an approximate increase of 24% in the market size for gyms in this place over the previous years (Marshall, McManus and Viele, 2008, Pp: 56-65). Like in every industry this industry also has a lots of changing environment in its demand as it increases in the month of January after the holidays and it decreases by the time of April as people look to prefer for sports like basketball, football etc. in place of gym. The employees must be aware of this changing environment and act accordingly. Target Market Avery Hill Gym needs to target its customers and look to focus mainly over them. The major target customers for this gym are the people of Greenwich who are above the age of 16 and also the working class in the city (Kotler, 2008, Pp: 86-92). The gym’s target customers are in the range of age 16-35yrs which covers the maximum population in the city and it also look to target the various schools and universities and have partnerships with them to provide facilities to students of the particular school or university. Marketing Audit Strengths and Weaknesses Strengths- Avery Hill Gym had the following strengths in its characteristics which gives it a good image over its competitors. It has a combination of both fitness and cross fit center which helps customer to join in either of the courses as per their benefits. It is located in a good location of Greenwich from where it gets a good visibility to most of the population of the place. The service quality provided to the customers is very high with good trainers and also highly technically sound equipment’s. The gym also gives its customers the benefit of multiple payment options which helps the customer to pay using various options based on their choice and convenience. Weakness- There is also certain weakness for the gym towards which the Gym must have a good idea and try and improve it in every way. It doesn’t provide the facility of spa. As it is entering into a new market so it has low information about the market demand. It has an uncertainty with the finance available which depends a lot on the customers those come in (Westerfield, Ross, Jaffe, and Jordan, 2008, Pp: 113-117). Opportunities and Threats (PESTEL Analysis) Opportunities- Entering into the new market of Greenwich it has many opportunities to grow its business in a huge way. These opportunities are been listed below. Providing summer courses for the children’s. It has a huge market to expand if the business gets more demand from the customers. Avery Hill Gym also gets funding help from the government of Greenwich. With improving technology it has a great opportunity to bring in highly technically equipped new equipment’s to provide the best service. Threats- The gym has got many threats to its growth by the following ways. The starting investment capital is very high. The change in demand with respect to the season is a huge threat as because of which the revenue generated in different seasons might be affected in a huge way. The threat from also other new competitors coming up in the market and also competition from the existing customers. The threat is also from the substitutes like sports, yoga etc. (Hawkins, 1998, Pp: 223-226). Competitor Analysis As per Kotler for a company to achieve the competitor advantage it needs to provide more value and achieve customer satisfaction to a huge extent to all its target customers. With respect to the direct competition from the other gym’s that are present in Greenwich with the service been provided the SWOT analysis based on the competitors is been done below which gives a clear idea about the strengths, weakness of the competitors. Strength- The strong hold over the market position. Support from the local municipality. Weakness- With saturation of their facilities they have less chance to come up with new equipment’s and services. Opportunities- Chances of expansion are more for them as they have an idea of the local market demand. They can get good co-operations from the facilities available in local market because of its presence. Threats- The upcoming of new companies like Avery Hill Gym. Threat of substitutes. Apart from so many competitors in the same business there are also many indirect competitors for Avery Hill Gym. These indirect competitors are like sports in various forms like football, basketball etc. affect a lot over the company’s business as with the change in season people tend to change their preferences towards sports than going to gym’s especially in the summer season which can affect the company’s revenue in a big way (Hague, and Jackson, 1994, Pp: 134-138). Key Issues and Opportunities The key issues for the company to keep in mind are the presence of the competitors and also have to look to find the exact demand of the gym in the market of Greenwich which will allow the company to pitch their facilities in a better way among the customers so that the customers see their benefits out of joining and getting the service from Avery Hill Gym. The company has got the huge opportunity to come up with all the latest technically equipped equipment’s to provide the best of facilities to the customers and thus needs to promote itself in the best possible ways for making the customers understands its message in a clear way (Larsen, 2010, Pp:4-6). Objectives (Strategic Objectives-including the assumptions) Revenues Annual Subscription Fees (in £) Period 2002 2003 2004 Young Teenagers 200 220 300 Business Professional 500 600 800 Old 100 120 140 Adults 300 400 500 Revenue of Avery Hill Gym (in £) Period 2002 2003 2004 % change Volume % change Volume % change Volume Teenage Centre 0 6000 47% 8800 105% 18000 Elite Centre 0 10000 50% 15000 87% 28000 Yoga Centre 0 1000 80% 1800 56% 2800 Adult Centre 0 7500 87% 14000 79% 25000 Total Revenue 24500 39600 73800 The above two tables shows the annual subscription for members which they can pay either as onetime fee or in instalments like per month. From the first table it can be seen that the business professionals have to pay the highest amount of annual fee followed by adults. Also Avery Hill Gym has increased the fees of business professionals the maximum (Madura, 2006, p. 142). The next table shows that Avery Hill Gym has four Centres. Each of them targets particular customer base. For example Teenage Centre is specifically targeted at Young teens. Similarly Elite Centre targets business professionals while the Yoga Centre targets mainly old, adult and business people. It is found that Avery Hill Gym has earned revenue of £ 24,500 in 2002. In 2003, it has registered a growth in revenue of 62% and in 2004 had achieved a growth of 86% as compared to 2003. The Avery Hill Gym has achieved a compounded annual growth rate (CAGR) of 74%. Thus Avery Hill Gym has achieved a significant rise in its revenue term (Wilkey, 2010, p. 83). Customer Base The customer base refers to the total number of customers which Avery Hill Gym will have during the first three years of its operations in 2002, 2003 and 2004. Avery Hill Gym targets four types of customers. They are young people who are basically in their teens and going to schools or college. The other is the business professionals, Adults and Old. They comprise of the customer base of Avery Hill Gym. Customer Base Period 2002 2003 2004 Young Teenagers 30 40 60 Business Professional 20 25 35 Old 10 15 20 Adults 25 35 50 Total 85 115 165 The above table shows that in the starting year, Avery Hill Gym will have total 85 customers, out of which young teenagers will be the highest among them. This is followed by adults and business professionals. After the initial year it can be seen that customer base of the entire segment has risen with Young teenagers, Old and Adults have increased by 100% from 2002 to 2004. This shows that Avery Hill Gym is growing in size across the entire major customer base (Peterson and Fabozzi, 2004, p. 85). Strategy Brief Description of Strategy The strategy to be implemented by Avery Hill Gym varies based on different aspects like it needs to have a different strategy for business management, different for development and different for the facilities. For Business management, development and also with related to facilities the strategies to be implemented are made based on the objective of ensuring good financial resources and distribute that amount in the perfect way so that Avery Hill Gym can afford to provide new improved facilities (Wright, 2006, Pp: 92-96). This strategies are been listed below. Hire the best fitness trainers to increase the demand of the customers and also skilled staff members. Conduct reviews regarding the business on a regular basis. It must provide the rates which are affordable for the students and based on the income of the people. It should have a continuous growth strategy by making partnerships with schools and universities. Be in touch with the members with regular SMS of health tips and also through email communications, and also conduct members functions and events. Increase and encourage the females so that they get enrolled for memberships by expanding facilities for women’s. Having a check over the cost for up gradation of the bathrooms and also providing lockable locker service to the members. Marketing objectives Positioning Strategy and theme or statement Avery Hill gym needs to position itself very carefully in the market of Greenwich among the peoples as a good fitness provider with all the new facilities and good instructors which will help people to be more fit and stay healthy in this fast moving world. It should look to cover all the population with price range which is very affordable for all the customers. The theme of the gym must be moving around the statement of “Eat well, Move More, Live well”, which will give a clear view of all the facilities provided by the company to the people of Greenwich (Wenderoth, 2009, Pp: 66-72). Branding Strategy The companies branding strategy has to very nice as it has to brand itself as the best service provider in fitness industry by providing the best facilities. The brand of Avery Hill Gym has to be a common man’s where every person can avail its service with less price and also multiple payments options. The brand has to be positioned based on its vision of becoming the best service provider and also provide the best facility to keeps its good brand image in the mind of the customers so that customers do refer others also to join Avery Hill Gym after getting impressed by its services and facilities. Product Strategy The product in this case is the service been provided by the company that is related to the fitness and health of people, and with the increasing trend of people working less with physical strengths they look to go for fitness centers. Thus Avery Hill Gym should look to provide the best of facilities, in case of Gym the major facilities that gives the company a competitive advantage are the presence of good equipment’s and good trainer. Thus Avery Hill must look to come up with the best of equipment’s that can provide the best of facility in providing good health to the customer along with the best of trainers and well trained staff members for the customers. The company should also look to provide tips of maintaining good health by sending SMS to its members and also through e-mails and provide other informations regarding the change in prices or the various offers that come up from time to time (Rossiter, and Percy, 1987, Pp: 126-132). Pricing Strategy With the rise of economy people are also looking to pay more for better products and facilities, but to enter into a new markets with competitors presence it is important to attract the customers first for which Avery Hill must provide its services at a reasonable rates which will be affordable for the customers very easily and with the facility of multi payment schemes it has more chance to attract more customers. The price is made different for different category of customers in different categories based on their occupation and this difference is been shown above in the table of objectives where the price for students, working people and old persons differ and it is taken into consideration that those prices are very reasonable and highly affordable for every of them . Distribution Strategy (Place) It has to concentrate over the whole of Greenwich and look to participate with the schools and universities in Greenwich which will help it to target the students of the schools and universities and promote itself to a vast population from a small platform and also the location to open the m must be a good one with good visibility and easily approachable for all the customers. Promotional Strategy Avery hill must go through a wide range of platforms for promotion so that it can make the customers understand the correct message that it wants to convey through. The various promotional activities it can conduct is by TV advertising, local radio advertising, conducting various events and health related functions creating awareness among the people regarding the benefits of staying fit. It should also look towards advertising through various magazines and brochures putting across the statement showing all its facilities to the customers. It can also come up with various health related magazines completely launched by itself to attract more customers (Pride, and Ferrell, 2011, Pp: 234-238). Services strategies The various services provided by Avery Hill gym are related to health, thus it needs to take care of the services that it provides to its customers are good and highly sophisticated to the customers and with good trainers and highly skilled staff members for providing good instructions and with well-equipped equipment’s it can provide good service to the customers. Resource Requirements and Budgets (Gantt chart) Avery Hill Gym needs many resources to start their business. They need to first select a site for building their gym. They need to enter into contract with a construction company who will do the construction of the gym. They need to have at least 20 employees to start their business. They need capital for starting their business which will be sourced from bank. The will take loan from bank which will be easy to get since they have no bad credit history. They need to buy gym instruments for their members and it will be different for different target market. Budgets Marketing Budget of Avery Hill Gym Particulars 2002 (in £) 2003 (in £) 2004 (in £) Advertising 2450 3185 4459 Website 735 809 889 Promotions 2450 3185 4459 Seminars 980 1176 1411 PR 490 588 705.6 Service 14700 16170 19404 Training 1225 1348 1617 Others 490 539 647 Total Marketing Expenses 23520 26999 33592 The marketing budgets of Avery Hill Gym shows that the total marketing expense in 2002 is £ 23,520 and it has increased by 43% in 2004 to £ 33,529. This shows that Avery Hill is investing heavily into their marketing plans to make their brand known across London. References Hague, P. and Jackson, P. 1994. The Power of Industrial Brands: An Effective Route to Competitive Advantage. London: McGraw-Hill. Harrison, J. S. 2003. Strategic Managements of Resources And Relationship. New York: Leyh Publishing. Hawkins. 1998. Consumer Behavior. India: Tata McGraw-Hill Education. Larsen, Nynne. 2010. Market Segmentation - A framework for determining the right target customers. [pdf] . Available at: . [Accessed on March 8, 2014]. Madura, J. 2006. Introduction to Business. London: Thompson/South-Western. Mankiw, N. G. and Taylor, M. P. 2008. Economics. London: Pat Bond. Marshall, D. H., McManus, W. M. and Viele, D. F. 2008. Accounting what the numbers mean. New York: McGraw-Hill/Irwin. Peterson, P.P. and Fabozzi, F.J. 2004. Capital Budgeting: Theory and Practice. New Jersey: John Wiley & Sons Philip Kotler, G. A. 2008. Principles of Marketing. Essex: Personal Education Limited. Pride, W. and Ferrell, O. 2011. Marketing. Stamford: Cengage Learning. Rossiter, R. and Percy, L.1987. Advertising and Promotion Management. London: McGraw-Hill. Wenderoth, M. 2009. Particularities in the Marketing Mix for Service Operations, Berlin: GRIN Verlag. Westerfield, R. W., Ross, S. A., Jaffe, J. and Jordan, B. D. 2008. Modern Financial Management. New York: McGraw-Hill/Irwin. Wilkey, D. 2010. Formula Marketing: Success Made Simple. New York: iUniverse Wright, R. 2006. Consumer Behaviour. Stamford: Cengage Learning. Appendix Gantt chart Week 1 2 3 4 5 6 7 8 9 10 Identification of Site Getting Bank Loan Buying Facility Site Construction of Facility Buying Gym Equipments Recruiting employees Engaging in Marketing Activities Starting Operation Read More