The International Gymnasium was opened in an Australian capital city in 1995, and is owned and managed by Mr Sam Burgess. The owner is a well-known identity in the sport of weight-lifting and held numerous titles during his weight-lifting career. The gymnasium is one-stop fitness centre with a men’s gymnasium, a women’s gymnasium, a Nautilus gymnasium and the main foyer. The gym occupies a first and second floor of the Legal Service building in Australia’s capital city centre. This report aims at studying the gyms strengths, weaknesses, opportunities and threats. The report will do a price comparison and based on that and services offered, it will establish which among the gymnasiums studied, offers its clients the best value for their money.
- Regular gym: $285 for 3 months, $ 450 for 6 months and $ 750 for 12 months
- Nautilus gym: $360 for 3 months, $570 for 6 months and $900 for 12 months
- Aerobic classes: $ 90 for 3 months, $210 for 6 months and $360 for 12 months
Using the solarium would cost $ 126, in addition to the other charges
American Health Studio
Membership fee: $300 for 3 months, $ 495 for 6 months and $750 for 12 months
Discounts are available for new members
Lifestyle at the Hilton
Membership: $1080 for 12 months
Negotiations would cost a client $ 540, and casual fee would cost a client $25 per visit
Nautilus Fitness Centre
Membership fee: $1290 for 12 months
Promotional discounts available to new and existing members
Borona Park Super Centre
Membership: $ 480 for 3 months, $660 for 6 months and $ 885 for 12 months
Murray O’Brien Family Health Spa and Fitness Centre
Membership: $585 for 6 months and $ 945 for 12 months
Aerobics $ 126 for 3 months
Membership: $675 for 6 months, $860 for 12 months and $1170 for 24 months
Every member pays a life membership fee of $ 145.
Comparing the prices, it is evident that America Health Studio offers the best monthly, half year and annual offer. The gym also offers discounts for new members and does not have extra charges such as a lifetime membership fee like in the case of McNallys. The gym ensures comprehensive services and products for its customers such as sports medicine facilities, aerobics and overall fitness packages.
Competitor analysis to establish the best value for clients’ money
There are different types of potential users of fitness facilities and products. “The first group is the body builders and weight-lifters, who are more concerned with physically appearance and fitness” (Bugnitz and Robert, 2004). They are driven by performance and use the gym regularly and consistently. They require facilities that enable them to maintain desirable fitness levels and keep up with the competition. The most important equipment for this group of people includes weights and mirrors.
The other group is the sporting people who are concerned with fitness, health and performance. Body tone and strength also play a major role in their daily schedules and the gyms they enroll in. They use the gym as a supplement to improve their fitness since they spend most of their time working out in sporting grounds. This group of people will look for fitness equipment in a gym and other complementary facilities for relaxation such as pools and spas.
The third group of people is people in the fitness and health category generally concerned about their physical well-being and overall body fitness. They are patricularly interested in a more relaxed environment to work out and are therefore, attracted by other complimentary services such as saunas and spas. They are not competitive and need a lot of motivation to stay actively involved in the gym.
The last group of people is those in the fashion and entertainment industry who largely care about their outlook, especially to the opposite sex. For them, the gym is a trendy thing to do. For this reason, a gym has to offer trendy fitness facilities and keep them entertained through other complimentary services such as spas and in house games. The way they are treated at the gym and the clientele play an important role in their choice of gyms.
Looking at International health and fitness centre and its competitors, they have put in the effort to ensure all the above considerations are in place. American Health Studio has a mixed gym and provides different work-out sessions for men and women. It is spacious, offers aerobics, and classes are conducted by qualified instructors. Optimal fitness tests are available, and there is a heated indoor pool. Inhouse doctors and child care facilities are provided as well as complimentary services such as saunas and spas. Uniformed instructors are available and are willing to assist the clients all the times.
Lifestyle at the Hilton is opened early and closed late and offers all the services offered by America Health Studio. In addition to those services, there is a solarium, stretching classes, a jogging track, an eating area and a tennis court. Instructors are friendly as noted in the survey, and the staff is friendly. These services are replicated in the Nautilus Fitness Centre, who also offer martial arts, in addition to the package. Boronia Park Super Centre and Murray O’Brien Family Health Spa and Fitness Centre both offer the same services and are opened for more 16 hours a day. Murray O’Brien Family Health Spa and Fitness Centre offer yoga, jazz ballet, swimming lessons, aquarobics, solarium booths and squash courts.
The International gymnasium has ensured its services match up to the high costs it charges its clients. From the Nautilus gym, clients have time-efficient equipment, there are aerobics classes on a daily basis, qualified instructors to meet specific needs of clients, customised products to suit a wide clientele such as solarium, martial arts, massage, beauty therapy and child care, and customers are also provided with lockers and towels at an extra fee. To ensure comfort, there are different spas for women and men. There is soap and hair driers in the shower areas, making it easy for customers to work out anytime they want to because they can freshen up and go back to work.
From the analysis, the International gymnasium offers its customers the best value for their money. The customers can pay for a specific product such as regular gymnasium or aerobics to enable them save money. A travel agent located in the gym offers discounts to members of the International gym and membership can be total or separate for different services to allow customers a wide variety of payment options to choose from. Since the gym is owned and run by ex-state champion weight-lifter, its clients can be assured of professionalism. It is therefore safe to say that even though International has several challenges to address, it still remains the best option for clients and gives them the best value for their money.
- Since the gym is owned and run by ex-state champion weight-lifter, it is able to maintain credibility and clients are confident of his skills.
- From the Nautilus gym, clients have time-efficient equipment
- There are aerobics classes on a daily basis
- Qualified instructors are available to meet specific client’s needs
- Customised products to suit a wide clientele such as solarium, martial arts, massage, beauty therapy, child care. Customers are also provided with lockers and towels at an extra fee.
- To ensure comfort, there are different spas for women and men
- There is soap and hair driers in the shower areas, making it easy for customers to work out anytime they want to because they can freshen up and go back to work.
- A travel agent located in the gym offers discounts to members of the international. This makes it more convenient for clients who travel more often
- Membership can be total or separate for different services to allow customers a wide variety to choose from
- As a result of the owner’s reputation, international body builders prefer to train in the gym when visiting the country
- Well qualified employees. For example, the fitness assessment officer had been previously employed by the Australian Institute for Fitness Research and Training
- Majority of employees are employed on a casual basis
- No discounts for new and existing clients
- No price-based promotional offers
- Instructors do not wear uniform for identification
- An assessment showed that instructors are not always present to assist employees when they are using facilities
- Lack of standardised procedures for dealing with customers
- Staff were not motivated and not clear
- The gym lacks a logo or corporate colours
- Little exposure through the mass media as the gym relies heavily on word of mouth as a promotional medium
- The Australian market is growing and most of the population is in the urban region offering the business a bigger clientele
- A growth in the fitness industry offers a bigger market for business and especially female participation in the physical fitness and health industry.
- The business has an opportunity to collaborate with other fitness promoting organizations in Australia to enable it reach a bigger market.
- If the business outsourced its web development and e-commerce, it would be able to reap more benefits from the online marketing avenue by accessing expert services.
- Increased competition could threaten the business’ profitability if it does not address the weaknesses facing it
- High cost of maintenance and acquiring new fitness equipment
- Price competitions could hurt the business’ revenues.
Reccomendations to increase profitability
Market trend analysis and competition
To effectively compete in the market, a proper marketing strategy must ensure that the product is felt in the market not just when it is new but in the many years that follow. “Ultimately, each product will reach its maturity stage and its declining period but how long that takes is dependent on several factors” (Ferell & Michael, 2008). These factors include the ability to fight price pressure from a competing product, ability to maintain brand loyalty, how well it can hold with the emergence of new products, how soon the market gets saturated amongst many other factors. Lack of growth drivers however has negative effects on a product’s performance in a market regardless of its quality or how well it can cope with pressure and competition in the market.
Pricing and profitability strategy
“While the profitability of different companies will vary in the same market, its average profit potential is used to give guidelines on how easy or difficult it is to do well in it” (Lennon, 2007). Several factors determine how profitable a market will be. “They include supplier and buyer powers, threat of substitute products, entry barriers and rivalry among different firms” (Braun, 2009). It helps to identify a market’s potential and benefits a business will enjoy by being in the market. This then allows a company decide on which products to sell in the market, selling and pricing strategies.
Factors that the international gymnasium should consider when pricing their products should include maintenance costs, target market, competitors’ pricing, consumers’ wealth, spending habits, among many other factors (Peng, 2000). International gymnasiusm’s pricing strategy must also take into consideration how well its products have performed in the time it has been in existence. The business must be able to do a market analysis and survey. “The survey must be based on the market segment, premium and specialty brands, share of volume growth estimated in percentages per year against the overall growth rate of the industry” (Plummer, 2003). By identifying their growth level, it will be possible to analyse its advantages as it tries to convenience the people to try its products.
Marketing is a key tool for any business today (Plummer, 2002). The business’ clientele, financial position and target market will determine the strategies used for marketing. The business should involve itself more in traditional marketing avenues such as television and print media. Online marketing presents a good avenue for the business to reach a bigger market at a cheaper cost and in less time (Ranchhod and Claire, 2004). The management should also liaise with existing fitness and physical well-being organizations and clubs to market its products. Diversification for the business will be key in increasing its revenues and this can be done by introducing new products or having bigger target markets (Hoskisson and Michael, 2008.)
A demographics study will enable the business make valuable decisions on how to diversify its investments. The Australian market for instance is still under-explored while its population is now nearly hitting the 100 million mark (D’Angelo, 2010). Such a market presents a great opportunity for International gymnasium to establish new target markets in different cities in the region. The region records high numbers in consumer expenditure making it easier to market a product. The income level in the region is steadily rising, especially as the global economy continues to stabilize. It would therefore be a perfect timing for the business to re-launch its products in the capital city and expand to other cities. High income levels in the Australian market means that people are able to buy high quality and safe fitness products such as those offered by International gymnasium.
The International Gymnasium was opened in an Australian capital city in 1995 and is owned and managed by Mr Sam Burgess. The owner is a well-known identity in the sport of weight-lifting and held numerous titles during his weight-lifting career. The business’ strengths include customised products for customers, well qualified employees, time-sufficient equipment and the owner’s reputation as a successful body-builder. Weaknesses include poor employment terms, lack of standardised procedures to deal with customers, little exposure to the mass markets, among others.
The business still stands a chance to excel due to the many opportunities available to it. They include a growing urban population in Australia, online marketing avenues and a positive growth experienced in the industry today. However, the business needs to address threats facing it to be able to fully benefit from the opportunities. Threats facing the business include stiff competition, high cost of doing business and price based competition. Available solutions to increase profitability include proper strategies to deal with competition, marketing tools and techniques, competitive pricing strategies and establishing a productive and competitive team. A competitive team can be established through improved employment teams, advertising itself as an employer, and embracing training and team building activities.
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