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MODULECODE:UMKD6Y-30-3CONTEMPORARYISSUESINMARKETING

SPORTSMARKETINGPLANFORTHEGYMGROUP

11022406

Wordcount-2750

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1.0Contentspage

1.0Contentspage................................................................................................................................22.0Introduction...................................................................................................................................33.0Marketbackground....................................................................................................................33.1TheHealthandfitnessmarketconsumer....................................................................43.2Competitoranalysis...............................................................................................................4

4.0Strategicpriorities......................................................................................................................54.1NewProduct/servicedevelopment.............................................................................54.2Differentiationandre-position.........................................................................................54.3Increaseloyalty.......................................................................................................................64.4Digitalpromotionandre-brand.......................................................................................6

5.0Objectivesandgoals...................................................................................................................66.0Thetargetaudience....................................................................................................................76.1Segmentation............................................................................................................................76.2Targeting....................................................................................................................................76.3Positioning.................................................................................................................................8

7.0Strategy............................................................................................................................................87.1Acquisition..............................................................................................................................107.2Retention.................................................................................................................................10

8.0Tactics...........................................................................................................................................118.1Product.....................................................................................................................................118.2Promotion...............................................................................................................................118.3People.......................................................................................................................................138.4Placeandprice......................................................................................................................13

9.0Implementation.........................................................................................................................1410.0Measurementandcontrol..................................................................................................1510.1Standardsandevaluation..............................................................................................1510.2Feedbackandcorrectiveaction..................................................................................16

12.0Appendices...............................................................................................................................1713.0References................................................................................................................................4414.0Bibliography.............................................................................................................................46

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2.0Introduction

TheGymGroup,(TGG),pioneeredtheBudgetGymSectorin2008andisnowoneof

2771clubsintheUKHealthandFitnessClubsmarket.(Mintel,2014).Despite

competitionTGGhadanotherstrongyearin2013opening8newgyms,

membershipsalsogrewby36%,asdidTurnoverby58%.(TheGymGroup,2013).

TGGdifferentiatesitselffromit’smaincompetitionthrough4maincompetitive

factors1)alowcostmembership2)nocontract3)open24/74)hightechnological

equipmentandanindustryleadingwebsite(seeappendices22).

TGGhasabrandpromiseofa‘Priceforlife”withnochangeinmembershipprovided

bythesamefriendlyteamanda24-hourgymaccessandavision‘Todriveindustry

changeandprovideconsumerswiththemostaffordable,flexibleandcompelling

gymmembershipavailable”.(TGG,2013).

3.0MarketbackgroundTheUKHealthandfitnessmarkethasremainedworth£2660millionforthe

secondsuccessiveyearin2013.Expectationsfor2014areformodestgrowthin

marketvalueandvolume,reflectinglikelyimprovementsinlivingstandardsin

thesecondhalfoftheyear,aswellasincreasesinconsumerconfidenceand

fallingunemployment.ForecastssuggestthattheUKHealthandFitnessmarket

willgrowby5.9%inthenextfiveyears,toavalueof£2,823millionby2018.

(Mintel,2014).

Thelow-costsector(seeappendices1)continuestooffersignificantgrowth

opportunities,numberofsitesgrowing21%from2013-14cancellingoutthe

difficultiesexperiencedbythemid-marketsegmentandlittlegrowthinthe

premiumsector,toreportalargelyflatHealthandFitnessMarket(Mintel,2014).

WithMintelestimatingthatthebudgetgymsectorisnowworthjustunder£220

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million,whichequatestoaround8%oftotalexpenditureonhealthandfitness

clubsintheUK.(Mintel,2014)

3.1TheHealthandfitnessmarketconsumerThekeymarketdemographicssuggestcommunicationsshouldbeaimedatyounger,moreaffluentconsumers.(Seeappendices2forfullprofile).WetakeacloserlookatTGG’scustomersinsection6.0,pleasealsoseeappendices9.Age 16-34Class ABC1,AB,C1Gender Slightmaledominance

3.2Competitoranalysis

UsingMinteldata(seeappendices3)onthetopBudgetgymsintheUK,thisplandeterminesTGG’smaincompetitorsandthemarketsharebothintheoverallhealthandfitnessmarketandthebudgetsector.Wewillbefocusingonthebudgetsectorinthisplan,ofwhichTGGhas20%marketshare.

Figure1-Marketshare,sourceMintel2014

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4.0StrategicprioritiesAnextensivemarketaudithasbeenundertaken(seeappendices4-11),Using

findingsfromtheauditanInteractionMatrix(seeappendices5)wasutilisedto

decipher4mainstrategicprioritiestomaximiseTGG’sstrengthsandexploit

opportunitieswhilstminimisingtheweaknessesandthreats(Weihrich,1982),

withtheaimofenablingTGGtoachievetheirvision.

4.1NewProductdevelopment

Ourresearchhighlightsthatnewtechnologiesareneededtosatisfythetarget

markettoreducetheeffectofsubstitutetechnologyproducts(seeappendices

5,6,8)assupportedbyresearchfromMintelstatingthatWithpressureonliving

standardsintheUKconsumersareoptingforamobileapplicationandwearable

technologyasanalternativetogyms(Mintel,2014)withapplicationsinthe

HealthandFitnessmarketgrowingat62%doublethatofregularapplications

(TheGuardian,2014)andover15%ofconsumersnotonlyinterestedinnew

productsbutwillingtopayextraforthem(Mintel,2014)(seeappendices12and

13).

4.2Differentiationandre-positionOurcompetitivebenchmarkingandanalysis(seeappendices7)andcurrent

positioningofTGG(seeappendices7)illustratesthattherationalpointsof

differenceTGGoncedifferentiateditselfwithandthatbudgetgymscompeteon

(seeappendices1)havenowbecomebasicpointsofparity.(Barney,1991).

TGGshouldaimtoexploitit’ssocialandenvironmentalgoodtore-positionand

differentiateitselfinthemarketasNielson2014statesthatover40%of

consumersinEuropeandonein4intheUKarewillingtopaymoreforproducts

andservicesthathaveapositiveenvironmentalandsocialimpact.Furthermore,

bymaximisingthegymgroupsuseofenvironmentalandsocialgood,TGGwould

minimisethethreatoftheUKgovernmenttaxreliefs97and98(seeappendices

4)andtheincreaseinenergycostsoverthepast5yearsputtingastrainonthe

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sectorsoperations(Mintel,2014).Thismayalsohelptomotivateawidertarget

audiencetouseTGG’sservicesascurrentlyoverhalfofalladultshavenever

usedagymandwouldnotconsiderusingoneinthefuture(Mintel,2014).

4.3IncreaseloyaltyTherateofattritionfortheHealthandFitnesssectorisbetween30-50%andis

thehighestinfluencingfactoronprofitmargins(IHRSA,2014),TGGmustuse

furthertechnologiesdesiredbyconsumers(seeappendices12)toincrease

loyaltyfurthersupportedbyForbes(2012)andReichheld,(1996)suggesting

thatattractingnewcustomerscancostacompanyfivetimesmorethankeeping

anexistingconsumer.

4.4DigitalpromotionandbrandidentitybuildingWith57%ofconsumersnotassociatinganybrandattributestoTGG,(10%more

thananyotherleadinggym)(seeappendices14)(Mintel,2014)andTGGbeing

seenaslocalgym(Oxygen,2012)TGGshouldcapitalizeonitsonlinepresence

(seeappendices7)anduseDigitalMarketingincludingsocialmediaasMintel

(2014)suggesttherapidgrowthofSmartphones(supportedbyoffcomm,2014)

andSocialMediahasleadtoacosteffectivetechniqueforgymstocommunicate

theirbrandidentitytotheirconsumers.

5.0Objectivesandgoals

Long–termobjectives(OverallobjectivestobeachievedbyDecember2016)

1. Toincreasemembershipsalesby25%

2. Toincreasebrandrecognitionandrecallby20%amongstthetarget

audienceasahightech,environmentallyandsociallygoodorganisation

Mediumtermobjectives(CampaignobjectivestobeachievedbyJune2016)

3. Increasetheaveragemembershiplengthfrom8.8monthsto11and

maintainasaKPIthereafter

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4. Achieveanaverageconversionrateof3%acrossDigitalmedia(Smart

Inisights,2015).*Conversion=onlinesign-up

Short–termobjectives(CommunicationsobjectivestobeachievedbyDecember

2015)

5. Increasemonthlytraffictothewebsitefrom67.2kto120kandmaintain

asaKPIthereafter

6. Increasesocialmediaengagementmagnitudefrom3.2to6andmaintain

asaKPIthereafter.

6.0Thetargetaudience

6.1Segmentation

Inordertoachievetheobjectives,thisplanmustsegmentandtargetallactual

(seeappendices,9)andpotentialbuyerswhohaveinterestfor,andaccesstothe

service(Keller,2012).UsingdatafromOxygen(2012),Mintel(2014)andSport

England(2015),segmentpersonashavebeencreated(appendices15)witha

95%levelandaconfidenceintervalof5%,togiveabetterideaofmotivations

andbarriers(Berry,1999)tousingTGG’sservices.

6.2Targeting

Currentandpotentialbuyershavebeengroupedintohomogenoustarget

clusters(BonomoandShaprio,1984)basedupontheir;age,gender,motivations

andbarrierstousingthegymandchannelstheyareresponsiveto.Wehave

chosenthesetargetsbasedontheirrevenuepotential(seeappendices16)and

becausetheycloselyreflectthedemographicsofTGG’scurrentcustomers(see

appendices9)togive3primarysegments:

1. Sportyyoungmales

2. Sportyageingmales

3. Sportyyoungfemales

And2Secondarysegments:

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1. Sportyageingfemales

2. SilverSurfermales

6.3Positioning

Asmentionedinthecompetitoraudit(seeappendices7),priceisacompetitive

factor(seeappendices1)butnotameansfordifferentiation;thisplanwilluse

technologyandenvironmentalandsocialgoodtore-positionTGGfavorablyto

thetargetaudienceandexploittheidentifiedopportunitytotargetconsumers

interestedinsocialandenvironmentalgoodwhilstminimisingthethreatfrom

socialenterprises(seeappendices6and8).

Communicationstoeachofthesegmentswillbemanipulatedinourtactics

(section8)basedupontheirbenefitssought,motivations,barriers,preferred

mediaandservicechannelandmarketingtone(seeappendices15).

7.0Strategy

WewillimplementaBlueOcean,(ChanandMauborgne,2005),Innovation

Strategy(Weihrich,1982)andatallstagesofformulationhaveexaminedour

planwiththestrategicpriorities(section4),theobjectives(section5),rational

factsfromtheaudit(appendices4-11)andthegoalofTGG.

TheGymGroup

PureGym

xercise4less

easygym.co.uk

gitness4less.co.uk

active4less.com

trugymgitspacegyms.o.uk

gym4allklickgitness

Highprice

Highuseof

technology

Highprice

Highenvironmenalandsocialgood

Lowuseof

technology

lowenvrionemntalandsocialgood

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Ourportfoliomanagementanalysis(BCG,1970)showsTGG’scurrentproduct

offeringtobeslowlymovingfromfastgrowth,arisingstar,toacashcow,in

maturitywithdeclinetofollowasTGG’spointsofdifferenceinthemarket

fuellinggrowthbecomebasicpointsofparity.(Seeappendices7).

Torevitalizethebrand,(Gale,1994)andextendtheProductlifecycle,thisplan

willactuponourresearchtoadoptamultistepflowofcommunication

Pullstrategy,(Fill,2009)undertakingnewproductdevelopment(Ansoff,2007)

implementingnewtechnologiesoutlinedinourtacticstodriveconsumers

throughthebuyerreadinessmodelAIDA(Strong,1925),withoutchangingthe

priceoranyofthebasicpointsofparityandpromiseheldbyTGGbut

augmentingtheserviceandextendingthebrand(Aker,1996).

OurstrategyencapsulatesInternalMarketing(Hooleyetal,2008),using

employeestoestablishtheemotionalserviceculture(Grönroos,2007)ofTGG

andpromotetheorganisationandcommunicatethebenefitsofusingTheGymat

everytouchpoint(Fill,2009)tohelpleverageasustainablecompetitive

advantage(Barney,1991)anddirectlyenhancecustomerloyalty(Oliver,1997).

Followingadifferentiationleadershipapproach,incontrasttoTGG’scurrentcost

leadershipapproach(Porter,1985)(seeappendices23),thisplanimplements2

mainstrategies:

Figure2-PLCofTGG

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7.1AcquisitionAbrandidentitybuildingstrategyhasbeadopted,toraiseawarenessofTGGand

buildTGGbrandidentity(Burmann,2009)(seeappendices10)through

communicationstothesegmentsthroughthemediathattheyaremost

susceptibletobrandmessagingfrom(TutonandSolomon,2013)withaspecial

emphasisondigitalvehiclestomaximiseeffectiveness,(Mintel,2014).The

messagescontainemotionalfocusonthebenefitssoughtofattendingthegym

foreachsegmentandovercomingthebarrierstheyholdforthegym,

(Berry,1999)asprofilingTGG’scustomers(seeappendices9and15)informed

ustheyseekappearanceandheathbenefitslinkedtoemotion.

Furthermore,promotingtheenvironmentalandsocialgoodofTGGhelpsto

achieveconsumerconfirmationorpositivedisconfirmation(Oliver,1997)

differentiatingTGGfromcompetitionasourresearchshowsonein4choose

socialandenvironmentallyfriendlyservices(Nielson,2014)andthecompetition

doesnotdothis,allowingustoexceedtheirperceptionsofservicequality

(Zeithamletal,1993),knownasconsumerdelight(Oliver,1997)andtherefore

achieveasustainablecompetitiveadvantage(Barney,1991).

7.2RetentionToretaincustomersournewproductdevelopmentstrategy(Ansoff,2007)

enhancesTGG’salreadystrongonlinepresence(seeappendices7)toexploitthe

InternetofThingsandhighinterestinnewtechnologiesintheindustry(see

appendices12)asourSituationalanalysishighlightedthattherateofattritionis

themainnegativeinfluenceronprofitmargins.

Theemotionalstrategydiscussedin7.1(consumerdelight)combinedwiththe

newproductdevelopmenttoenhanceusersusageandthereforebenefitssought

(seeappendices15)fromTGGalsoenablesTGGtomaximisesatisfactionwith

theendgoalofachievingloyaltyasElliottandPercy,(2007)suggestcustomer

satisfactionisthemainantecedentforloyalty.

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8.0Tactics

Pleaseseeappendices25forvisualizationoftactics

8.1Product

Retention

Thenewtechnologytobedevelopedwillrecorddataoncustomer’s

consumptionhabitsandusingIBMSPSSwillcalculateco-efficientvariation

(Pakos,2007)topredictcustomer’slikelihoodofleaving.

Usingthisdatawewillsendtargetedcommunicationstoeachsegmentthrough

theirpreferredmediaexpressingtheemotionalbenefitsandmotivationsthat

theyseekfromagymandprovidefreeservicessuchaspersonaltrainingto

increaseloyalty.ThisalsoenablesTGGtocrosssellwaterbottlesandfood

productstoincreaserevenue(Seeappendices15forsegmentspreferencesand

appendices17forfullmethodology).

Acquisitionandretention

Tofurtheractonourstrategicprioritieswewilllinkthisdatatoasmartphone

applicationandthewebsitethatwillgiverealtimenutritionaladviceand

workouttipsfromourpersonaltrainers,forfree,asidentifiedasamainservice

customersseek(Appendices12and13)thisincreaseincustomerssatisfaction

usinginnovativetechnologyisaimedtoretaincustomersandattractnew

customersthroughWOM(Trusov,2009)andourpromotionaltactics.

8.2Promotion

Acquisition

Awareness

Toincreaseawarenessamongst‘SportyYoungMales,‘SportyAgeingMales’and

“SilverSurferMales,wewilladvertiseusingonlinebannersandwewillcompete

tobenumberoneonthewordssearchedbyconsumerslookingforabudgetgym

throughsearchengines(seeappendices19)rollingoutaPayPerClickcampaign

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andimprovingtheorganickeywordsonthesitetoincreaseourawarenesson

searchenginesandachieveobjective5.

For‘SportyYoungFemalesand“SportyAgeingFemales’wewilladvertisein

printmagazines.MagazineadvertsandonlinebannerswillhavetraceableQR

codestoonlinesignupandouremailnewsletter.Contentwillhighlightthe

environmentalandsocialgoodofTGGandtheemotionalbenefitsdesiredbythe

segmenttheytargetusingemotionalsuccessstoriesofcustomerslikethem

usingthenewtechnology.

Interestanddesire

Togeneratedesireamongstallsegmentsatthelaunchofournewtechnologies

andtobenefitfrommulti-stepcommunication(Fill,2009)wewillrunauser

generatedcontentsocialmediacampaign,firstlykickedoffbystaffwhousethe

gymwiththephrase‘Didyouknow?#TGG’.Movingtocustomersthecampaign

willprimarilyEncourage“SportyYoungMales’and‘SportyYoungFemales’as

theEarlyAdoptersofnewtechnologytosharecontentonline(Rogers,1995),to

increasereachwewilluseSocialNetworkAnalysisandmotivatekeyopinion

leaders(ZhangandDong,2008)toendorsethebrandforafreemembership.

Action

Ourcalltoactionforcustomersuploadingpictures,videos,commentsand

reviewsofthemusingthetechnologywillbeafreetrialintheformof,‘bringa

friendforaweek’vouchersandprizesforthewinnersofthebestpictureswith

theirfriend.Theuptakeofthesocialmediacampaignamongstthetargeted

segmentcanbelinkedtothembeing‘earlyadopters’thatadoptdueto

interpersonalcommunication(MullerandBass,1990),furthersupportedby

appendices15dataillustratingthesesegmentsseekasociablemessageand

experience.

Reviewsfromcustomerswilldrivethe‘lateadoptersandlaggards’throughthe

BuyerReadinessModel(Strong,1925)as70%ofconsumerstrustonline

consumeropinion(Nielson,2012).Furthermorelinkingtheenhancedsocial

engagementtooursitewillincreaseourSearchEngineOptimization,online

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presenceandthereforehitstoourwebsiteandawarenessfromsegmentsthat

usetheInternet.

Retention

Sendemailnewsletterswithdietaryadvice(seeappendices12)andinformation

aboutthenewtechnologies.Alsoencourageuserstopartakeinthesocialmedia

campaigntobringtheirfriendstothegymforfree.

8.3People

ToestablishtheservicecultureandbuildthebrandidentityofTGGusing

InternalMarketing(Hooleyetal,2008)theanatomyofanorganisation(see

appendices20)highlightstheneedforextraskillsrequiredforthisplantotake

place:

1. Onlineanalyticalskills

2. Customerunderstandingandinsightmining

3. Webdevelopment

4. Searchengineoptimization

FortheseskillswewillbeworkingwithActionableInsight,aDigitalconsultancy

tomangethesuccessofourplan.

8.4Placeandprice

Tomitigatetheeffectoflocationandattendancecausinguserstoleavethegym

(seeappendices18)TGGwillofferanationalmembership,wherebytheusercan

useanyGymGroupgymacrossthecountryatanincreasemonthlyrateof5%.