Developing a Competitive Marketing Strategy: The Case of a Complete Fitness Gym.

• Author: Swaid, Sami A.

INTRODUCTION

Jim Press and Ed Curl have developed a concept for CFG to be opened in the suburbs of a southern metropolitan area. They have assessed the needs and trends of the target market, and the strengths, weaknesses, opportunities, and threats of establishing a fitness club in one of the smaller cities adjacent to a major city. Demographic information for the target market and several economic indicators suggest that the fitness business in the area would be a viable business undertaking. Press and Curl believe that they can establish CFG as a business organization at the right time and at the right place.

Demand for quality fitness clubs is high, and the disposable income of the target market is also high, a combination which facilitates the success of the organization. Nonetheless, the fitness industry has been plagued by a high degree of failed ventures. Press and Curl have been told that 80% of new fitness clubs go out of business within the first 39 months of operation. Jim and Ed are concerned that this could happen to them. In order to succeed in a very competitive environment, CFG must differentiate itself by the quality of its customer service and the products it offers. In addition, it is imperative that CFG adopt a strong promotion strategy if it is to later expand to other locations around the metro area. CFG must be well positioned to benefit from a growing market and changes in lifestyle, so that it can offer its members the fundamental elements that will determine the success of the organization: customer service, dedication to quality, and value.

During the past decade, Americans have become more consciously oriented towards health and fitness issues, creating a new way of thinking that affects the way they live. This fact is due in part to increased awareness about health issues and concerns, promotion of programs to increase body fitness, and greater availability of information about general health, wellness, and fitness issues.

America is the fattest nation on the face of the earth. Children's obesity is a top concern in the U.S. Health and fitness professionals predict that schools are unlikely to increase time devoted to physical education or nutrition education; thus, providing physical activity for kids may fall in the hands of the health/fitness industry along with fitness professionals.

At the other end of the age spectrum, preventive care is highly important because it involves the baby boom generation which is growing older and living longer, and their physicians are recommending they remain active. Exercise is becoming a larger part of preventive care for older adults to help fight osteoporosis, reduce the risk of everyday injury, and maintain independence. Lawmakers have become very interested in the obesity crisis in the United States, and they suggest that if they can increase the physical activity of Americans, hopefully the end result will be a decrease in health-care costs.

Achieving and maintaining a healthy lifestyle has become an important part of the American society, from early in life to later in adulthood. People are constantly encouraged to develop interests in sports and other exercise activities, which have a good probability of being continued over their entire lifespan. Walking, running, skiing, cycling, rowing, swimming, tennis, racquetball, volleyball, rope jumping, hand ball, are just a few exercise activities which children can expect to carry on into adulthood.

Subsidy of preventive lifestyle programs are now being offered by many health-care providers and business companies. They provide and/or partially subsidize preventive lifestyle programs, such as providing web sites for wellness information, risk assessment, fitness calculators, how to contact a fitness professional, and other services.

FITNESS MARKET TRENDS

Going to a gym has created new opportunities for people to socialize in a different type of environment. This cultural shift has transformed the fitness industry, as people now impart an additional dimension of value to becoming members of a fitness club. Prospects can benefit from finding a gym that meets, not only their fitness needs, but also offers chances of finding others that are close to their age and interests.

The fitness market is evolving at a fast pace, with new business models, training concepts, and trends emerging constantly. The United States is the single biggest market worldwide not only in terms of revenue but in regards to the number of members in health and fitness clubs as well. A professor friend who knows the sector has provided them with some data. He estimated that in 2017 a total of about 38,500 fitness and health clubs were operating in the U.S. with about 55 million members. The industry is estimated at $30 billion, has been growing by at least 3-4% annually for the last ten years, and shows no signs of slowing down. An increase in public awareness about the dangers of physical inactivity and the health and fitness industry's commitment to making exercise more accessible to Americans are contributing factors to this growth. He stated that about 25%of people in the United States, who work out at least once a month, say that exercise, workout, or sports in general is part of their daily routine. Almost two-thirds of people who regularly exercise are, or have been at some point, a member of a health club or gym. The main reasons for exercising are to stay healthy, reduce weight, optimize strength and/or endurance, to get a better-looking body, and improve overall appearance. Health and fitness clubs provide their customers with the infrastructure for their workouts and physical activity in exchange for a membership fee.

TARGET MARKET

CFG's primary target market...