marketin plan on health club
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MARKETING PLAN ONHEALTH CLUB
ADVANCED MARKETING MANAGEMENT
(MKT 302)
COURSE INSTRUCTOR - SUMAN SAHA
SUBMITTED BY
SIBLI SADEK 0820332
ISHTIAK AMIR 0910226
SUBMISSION DATE: DECEMBER 5, 2011
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LETTER OF TRANSMITTAL
Date: December 5, 2011
Mr. Suman Saha
Lecturer
School of Business (SB)
Independent University, Bangladesh
Bashundhara, Dhaka.
Subject: Submission of report on Marketing Plan.
Dear Sir,
We would like to express our gratitude firstly towards you for giving us this task which helped
us to learn and help to know lots of dynamic information which we never knew before .which
was done under your instruction. The main purpose of this report is to illustrate our work
regarding the marketing plan of a health club.
Sincerely yours,
SIBLI SADEK
ISHTIAK AMIR
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Acknowledgement
We would deeply thank our course instructor Mr. Suman Saha who gives us the excellent
suggestion, guidance, and encouragement all the times during our report writing. We cannot
complete this report without his consistent advice. We also like to thank our families, who have
always been supporting and understanding during this work.
We have tried our best to make the report informative enough for the people who would like
to acquire some knowledge on marketing management perspective. Still, due to our
inexperience there might be few unintentional mistakes. In that case, we seek your kindly
consideration.
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EXECUTIVE SUMMARY
We are planning to launch an exclusive health club in Dhaka. The service facility that we are
intending to provide is physical health care exercises with the help of specialized equipment.
We are targeting specific segment in the consumer market. Our ideal customer will be within
the age of 22-40 years old that are health conscious.
Our primary objective is to obtain minimum 1200 new customers in the first year. The primary
financial objective is to earn TK.300000 by the end of the first year. Our motto will be A sound
health can provide a sound mind.
Mission and Vision
Vision: To create awareness about healthy lifestyle and its benefits
Mission: To provide strategies and training programs related to health care
Strengths and Core Competencies
Lowest cost of services in comparison to competitors
Certified trainers from top ranked health care institutions
Owners commitment and dedication towards health care services
Challenges
Active Health and Fitness will face a challenging situation in creating its brand image and
attracting customers towards their services due to presence of already established players in
the local market.
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TABLE OF CONTENTS
Executive summary......................................................................................................Page 3
Table of Contents.................................................................................................Page 4
Current Marketing Situation.........................................................................................Page 5
SWOT Analysis.............................................................................................................Page 9
Objectives and Issues.................................................................................................Page 10
Marketing Strategy.............................................................................................Page 11
Action Programs.................................................................................................Page 17
Budget.............................................................................................................Page 18
Controls......................................................................................................................Page 19
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CURRENT MARKETING SITUATION
A health club can be described as a service facility that is intended to provide physical health
care exercises with the help of specialized equipment. It normally serves both male and female
customers but in some cases females are provided special attention by providing them female
only health clubs in which all staff including trainers are also females. Normally, the
environment is made casual to provide customers comfortable experience that helps them
performing bodybuilding and other exercises with ease.
Market Description
Active Health and Fitness will position themselves as the most effective in providing work out
friendly environment. The Active Health and Fitness member will bring friends and family to
work out with, but soon discover a wealth of team sports options to participate in fun league
play. The member will become even more motivated to work out, although exercise will no
longer feel like work. Surrounded by old friends and new friends, it will feel like play and the
member will develop an attachment for the Active Health and Fitness brand. In time, this
individual will encourage more and more friends and acquaintances to join Active Health and
Fitness so that they, too, can experience how exercise can become "play" rather than "work".
The ideal customer for Active Health and Fitness is a 22 - 40 year old resident of the
Bashundhara Residential area, living or working in that area. These individuals believe in the
idea of fitness, but may find it hard to motivate themselves for solitary fitness activities (such as
running, biking, or working out alone). To that end, this individual benefits from fitness
activities with others or when others are around.
The characteristics of the Active Health and Fitness target market are:
y 22-40 years old
y At least Tk. 300,000 per year personal income
y Professional/white collar occupation
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y Lives or works within short distance of the club
y Finds it difficult to motivate self to exercise alone or simply prefer exercise with others
y Believes that fitness is important to health
y Believes that fitness and social sports activities are a good way to spend time with
friends
Market Demand
Health care club market in Bangladesh is getting more and more demanding with the passage
of time. Following are the common demands that have arise in recent past:
y Customization: People who already have membership or those who are willing to have
one, are interested in subscribing to a customized health care plan according to their
requirements or as per the recommendation of medical expert.
y Ease of Service: People are looking for exercises that are easy to adopt and are
performed by expert trainers.
y Effectiveness of Exercise: Members are very demanding over results of the exercises
which they are performing. An expert trainer can be helpful in setting a proper exercise
plan for the members so they can work out accordingly.
Factor Causing Market Demand
Per Capita Income Increase: Continuously increasing per capita income in the last decade has
enable people of Bangladesh to focus more on their health related issues such as spending time
in health care clubs and gyms. Health care expenditures are directly fueled by this increment in
per capita income.
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Service Review
Active Health and Fitness service offerings include the following:
For Prospects:
y Free 3-Day Guest Pass for access to the club
y Free introductory session with a trainer/staff member who can teach an exercise
regimen, give a tour of the club, and explain machines and service
For Clients:
y Standard membership - Monthly membership of Tk. 1500 per month (registration fee of
Tk.3000)
y Activities including basketball, bowling, soccer, softball, volleyball, group fitness classes
y Nautilus machines, free weights, variety of cardiovascular machines
y Supervised kid's room for additional fee
y Personal training with introductory price of Tk. 2000 per session for the first three
session
y Price goes to Tk.2500 per session after that point
y Blocks of twenty sessions at 20% discount
For Premium Clients (those who have been members for one year and have referred 4 or more
new customers):
y Private group option allowing member to create their own groups/teams of members
for certain team sports
20% first year discount to new referred customers.
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Competition Review
The competitors for Active Health and Fitness are some local clubs around Bashundhara, their
market is lower-income families and/or students who want accessibility and affordability of
fitness facilities. Some of the clubs in Gulshan area which aimed at casual fitness-seekers who
do not work out with a high intensity but still desire the status and recognition. Gold's Gym
which is a worldwide brand is also a competition to Active Health and Fitness. Their services are
targeted toward those motivated and dedicated individuals who workout five to seven times
per week
The prices for Active Health and Fitness are set 20-30% higher than independent gyms as the
range of activities offered through our club are much more substantial. This additional fee gives
room for Active Health and Fitness to offer promotions of one month free or a lower
registration fee from time to time to encourage new customers or referred customers.
Market Trends
Health care club industry has been changing its trends very quickly of late. Last five years have
seen major changes in trends such as following:
y Individual usage of fitness and health care training equipment has increased.
y Body work out and exercise has become a daily life routine of many Bangladeshi in the
last decade.
y Fitness memberships are increasingly getting popular in office environment of
Bangladesh. Companies are including health memberships as part of employee
remuneration package.
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SWOT ANALYSIS
The following SWOT analysis captures the key strengths and weaknesses within the company,
and describes the opportunities and threats facing Active Health and Fitness.
Strengths
y Results-orientated approach to attracting and maintaining customers.
y A well-researched, detailed health wellness program that is long-term in focus.
y Intensively trained staff.
Weaknesses
y High costs associated with customized, personal service.
y The inability to work on a high volume business model.
y The costs of attracting a large corporate client.
Opportunities
y Participation within a growing market.
y The large increase in clients that follows with the Facebook application of Active Health
and Fitness.
y The ability to leverage future quantitative analysis that supports the contention that
work out and sports have a significant, positive impact in life.
Threats
y Lack of immunity to an economic downturn.
y Potential competition from larger, well established competitors.
y A change in society where the individual begins to take far more responsibility for
his/her health maintenance.
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Objectives and Issues
We have set aggressive but achievable objectives for the first and second years of market entry.
First-year Objective
y Register over 1200 new customers
y Receive over 2000 lead referrals
Second-year Objective
y Achieve market share of 60% of Dhaka fitness and gym industry
y Register over 2500 new customers
y Receive over 5000 lead referrals
Issues
In relation to the club launch, our major issue is the ability to establish a well-regarded brand
name linked to a meaningful positioning. We will have to invest heavily in marketing to create a
memorable and distinctive brand image projecting on providing better quality services.
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MARKETING STRATEGY
Value Proposition
y State of the art facility with latest equipment from quality manufacturers
y Low cost with monthly, quarterly and annual subscription plans.
y Personal qualified trainers to help our members achieving results without wasting much
time
Branding
Fitness Plus will create their official website for creating a brand and company image in the
market, as well as providing subscription online.
To redirect and refocus the Active Health and Fitness brand around the new concept of "Get in
shape together," the business requires work on the following elements:
y Logo - must be redesigned to incorporate the social aspect clearly
y Images - must be chosen from current customer images (with customer release to use)
showing group activities and socialization while exercising. Where these images do not
exist, a photographer will be hired over the course of a week to attend group sports activities and exercise sessions, with customer permission. These images will be
incorporated into the website, printed materials, and video ads in Dhaka and within the
clubs.
y Slogan - Will be changed to "Get in shape together" where it appears on materials and
website.
Positioning
The external marketing message of Active Health and Fitness is that exercise is more enjoyable
and easier to commit to when it is a social activity. The message of "Get in shape together" is
drawn out through images and language that furthers this idea. The internal positioning goal for
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the Active Health and Fitness staff is to see that customers achieve social results as they are
pursuing their fitness goals. This also influences staff training.
The services of Active Health and Fitness are not unique from all other fitness centers in the
Jamestown area. However, they are all positioned as social activities and a Active Health and
Fitness social networking application is used to help customers meet, keep in touch with, and
plan exercise activities with other customers.
Active Health and Fitness features:
y Numerous social sports groups both at the fitness clubs and in other venues in
Jamestown
y Exercise machines positioned to allow for and encourage social interaction rather than
solitary exercise
y Lounge area at each fitness club
y Active Health and Fitness Facebook app mentioned above
Service Strategy
The service experience of Active Health and Fitness is consistently examined through both
proactive and reactive quality assurance of facilities and staff. Customers will also be asked for
service improvements so that new services, activities, and classes are guaranteed to be of
interest to the current customer base. Finally, customers are encouraged to remain members
by additional benefits which accrue after one year of membership.
The primary loyalty offering for "Premium Clients" is the ability to create their own sports
teams and have full rights to admit the members of the team. For customers who take part in
team sports activities, this will be seen as a major incentive, as they will be able to create teams
within the Active Health and Fitness sports leagues consisting of their own friends and
acquaintances, whether from the past or other customers they have met at Active Health and
Fitness. These clients will be able to name their teams and receive discounts on ordering team
t-shirts and other items from local vendors. This will encourage these premium clients to refer
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even more new customers so that those friends can join their teams (only members may take
part in Active Health and Fitness sports).
Pricing Strategy
The prices for Active Health and Fitness are set 20-30% higher than independent gyms as the
range of activities offered through our club are much more substantial. The price is in line with
full-service fitness club chains in other cities. Pricing is set with a monthly membership fee as
well as a one-time registration fee. This additional fee gives room for Active Health and Fitness
to offer promotions of one month free or a lower registration fee from time to time to
encourage new customers or referred customers.
This year, prices will not increase, but they are set to rise 10% every three years or so.
Customers in the past have not cited price as a primary reason that they left the business, so
Active Health and Fitness feels its prices are reasonable for what it offers and the target market
of middle and upper middle class residents
Distribution Strategy
Sales/Distribution Plan
Active Health and Fitness will get a jump-start to building its client base primarily because of its
location and the fact that it is the only service provider of its kind in the area. This will make it
very easy for new clients to try Active Health and Fitness for the first time. It will then take my
total focus on customer service to ensure that those clients return.
Direct Supply / Direct Sale
Active Health and Fitness will have their health club facility in Bashundhara Residential area,
Dhaka. They will not involve in any kind of franchise or branch network other than Bashundhara
Residential area.
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Lead generation methods for Active Health and Fitness include the following:
y TV advertising
y Radio advertising
y Local newspaper advertising
y Flyers distributed at area establishments
y Referrals from existing customers
y Visibility of outdoor sports team activities
y Club signage and locations
y PR from local press about the business, its sports teams, etc.
Lead conversion begins with a call, walk-in customer, or email requesting membership
information. Emails are responded to by phone (a phone number is required for email inquiries)
so are treated like calls for the purpose of lead conversion methods:
Calls:
y A membership consultant will be available to take calls during business hours or return
the call within two hours. Emails will be responded to within two hours during business
hours.
y The membership consultant has the goal of getting the interested caller to come to the
club in person for a tour. They do not attempt to get a prospect to sign up over the
phone, although they can take information and do so if the caller expresses interest.
y Membership consultants will use a modified version of a script, but will be trained to
make it their own so that they do not read as they describe the club's key service
offerings.
Visits:
y For prospects who walk in or make an appointment to meet a membership consultant,
they will be given a tour of the club
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y These prospects will be asked if they are settled on joining at the end of the tour (trial
close)
y If they are not sure yet, they are offered the free three day guest pass to try out the club
Marketing Communication Strategy
The Active Health and Fitness Facebook page will ask customers to install the application which
facilitates the social initiatives of the business. The application allows:
y Direct messaging between club members when both agree to it
y Discussion groups to promote new teams, look for team members, or find partners to
attend training, fitness classes, or other activities with
y Matching service to provide potential matches between those who are looking for
workout partners (similar to a dating site's functionality)
The social networking application will be a way for existing customers to interact more deeply
with each other and with the brand of Active Health and Fitness. It will also allow customers to
easily share and promote Active Health and Fitness to their Facebook friends by making some
activities appear in their News Feeds. This will help customers seek out friends, family, and
colleagues as referrals, fulfilling their goal to achieve referral rewards.
Marketing Research
Active Health and Fitness will attempt to impress customers through quality assurance of
facilities and staff and by constantly listening to customer interests for new service offerings
and responding to these with new service offerings every four months (three times a year).
Q uality assurance of facilities includes daily checklists by maintenance crew, more detailed
weekly checklists for the maintenance crew supervisor and a monthly checklist for the club
manager. Problems with machines or the facility can be logged at the front desk, anonymously
by note into a suggestion box which is reviewed daily, or by phone to the maintenance support
voicemail. All of these items will be checked daily and examined physically in twenty-four hours.
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Whenever possible, an email or call will be made back to the individual who made the request
to acknowledge that it was heard and again when the problem is rectified. There is a goal of
97.5% functional machines at all times (meaning only 1 in 40 may be out of order on any given
day). Clubs that fall below this level will be examined by the operations manager to determine
where the problem lies.
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BUDGET
Profit and Loss Projection
Year 1
Revenue (Sales)
Health club memberships
Total Revenue (Sales)
Operating Expenses
Health club development
Personnel
Capital Expenditures
Consulting Services
Promotion
Total Operating Expenses
Profit Before Taxes
Taxes (15%)
1800000
1800000
500000
800000
100000
50000
1450000
350000
52500
Net Profit 297500
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