MARKETING PLAN ON HEALTH CLUB

ADVANCED MARKETING MANAGEMENT (MKT 302)

COURSE INSTRUCTOR - SUMAN SAHA

SUBMITTED BY
SIBLI SADEK 0820332

ISHTIAK AMIR 0910226

SUBMISSION DATE: DECEMBER 5, 2011

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  Owner s 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 Action Programs Budget .............................................................................................Page 11 .................................................................................................Page 17

.............................................................................................................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 y y

22-40 years old At least Tk. 300,000 per year personal income Professional/white collar occupation

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y y y y

Lives or works within short distance of the club Finds it difficult to motivate self to exercise alone or simply prefer exercise with others Believes that fitness is important to health 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:

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.

Ease of Service: People are looking for exercises that are easy to adopt and are performed by expert trainers.

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 y

Free 3-Day Guest Pass for access to the club 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 y y y

Activities including basketball, bowling, soccer, softball, volleyball, group fitness classes Nautilus machines, free weights, variety of cardiovascular machines Supervised kid's room for additional fee Personal training with introductory price of Tk. 2000 per session for the first three session

y y

Price goes to Tk.2500 per session after that point 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 y

Individual usage of fitness and health care training equipment has increased. Body work out and exercise has become a daily life routine of many Bangladeshi in the last decade.

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 y y

Results-orientated approach to attracting and maintaining customers. A well-researched, detailed health wellness program that is long-term in focus. Intensively trained staff.

Weaknesses
y y y

High costs associated with customized, personal service. The inability to work on a high volume business model. The costs of attracting a large corporate client.

Opportunities
y y

Participation within a growing market. The large increase in clients that follows with the Facebook application of Active Health and Fitness.

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 y y

Lack of immunity to an economic downturn. Potential competition from larger, well established competitors. 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 y Register over 1200 new customers Receive over 2000 lead referrals

Second-year Objective y y y Achieve market share of 60% of Dhaka fitness and gym industry Register over 2500 new customers 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 y y State of the art facility with latest equipment from quality manufacturers Low cost with monthly, quarterly and annual subscription plans. 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 y

Logo - must be redesigned to incorporate the social aspect clearly 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.

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

Exercise machines positioned to allow for and encourage social interaction rather than solitary exercise

y y

Lounge area at each fitness club 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 y y y y y y y

TV advertising Radio advertising Local newspaper advertising Flyers distributed at area establishments Referrals from existing customers Visibility of outdoor sports team activities Club signage and locations 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.

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.

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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These prospects will be asked if they are settled on joining at the end of the tour (trial close)

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 y

Direct messaging between club members when both agree to it Discussion groups to promote new teams, look for team members, or find partners to attend training, fitness classes, or other activities with

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). Quality 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 52500 Profit Before Taxes Taxes (15%) Net Profit 297500 500000 800000 100000 50000 1450000 350000 1800000 1800000

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APPENDIX
www.marketingplan.net/ www.studymarketing.org

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