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Introduction
This marketing plan is a part of a proposal for a corporate CrossFit gym. It will be used by the companys employees but also be open to the general public and advertised to them. As a result, it will improve the overall communitys health while also generating some revenue for the business. The presence of trainers who work using the CrossFit program will be the central selling point of the gym.
The approach is becoming increasingly popular across the nation due to its effectiveness. As such, it should attract a substantial number of people who want to try it and see the results. Overall, there is considerable potential for improvement in the well-being of the employees and some additional profit. This case brief will describe the current market situation, formulate the gyms strategy, and provide a forecast of its performance.
Situation Analysis
The gym market in the United States is substantial but likely not fully saturated. According to Fried and Mumcu, 58 million Americans with an average age of 40 used a gym or health club annually, generating $21.8 billion in revenue every year (6). The figure represents approximately 20% of the nations overall population, indicating that there may be potential for further growth. However, Trugman claims that the industrys expansion rate has slowed and attributes the trend to excessively high membership prices (170). Overall, the target population appears to be middle-aged people with substantial disposable income. They want to improve their health but can be price-conscious, emphasizing the price to the perceived effect ratio. They will come to a gym because few alternatives exist for combating obesity and improving ones health.
However, competition between gyms is strong in the area, as they try to attract the same customer base. They try to implement various attractive features such as discount deals for families or highly specialized equipment. They devote particular attention to trainers, who constitute a substantial part of a gyms attraction and can form a personal customer base. With that said, there are no CrossFit gyms in the area, which represents a substantial opportunity.
The positivity of the situation is supplemented by the current stable growth trends in the U.S. economy. The Consumer Price Index increased by 2.3% in 2019, indicating steady and controlled inflation and overall economic growth ( Consumer Price Index Summary ). Consumer spending is likely growing along with it, making them more likely to consider an investment into a gym membership and expanding the overall customer base.
Marketing Strategy
CrossFit is a somewhat different approach to traditional gyms that appeals to a slightly different audience. According to The Business of CrossFit, nearly half of the brands customer base is aged 25-34, and more than half earn $150,000 or more every year. As such, the gym will market itself to that customer base and use the power of the name to attract customers with no alternatives, positioning itself as an accessible, community-focused health option.
As per the central CrossFit proposal, its product portfolio will consist of an exercising regimen under the supervision of a trainer, with the value offer consisting of its unique and particularly effective nature. Due to this unique proposition and the high income of the customer base, premium prices can be justified. With that said, the companys employees will receive substantial discounts or be able to use the services for free. Within five years, the gym should acquire a stable audience of three hundred members who regularly visit it.
CrossFit follows an indirect distribution policy as a brand, affiliating with various gyms across the nation and allowing them to use its programs. With that said, the facility proposed in this plan will be a direct distributor, offering health services to visitors on-site.
Similarly, unlike CrossFits B2B model, the company gym will operate based on a B2C paradigm. It will use a combined marketing approach that consists of traditional advertising, online presence, and branding. The first two can let target audiences know about the opening of a new gym so that they can decide to attend it. The CrossFit branding will be used as the main differentiating point that will motivate customers to choose the facility over its competition. The brands online presence can also be useful in supplementing the reach of the gym due to its substantial follower base on several social media.
Implementation Plan
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Secure a building and prepare it for gym activities: $20,000, 2 months. The progress of the repair crew will be regularly monitored, and the final check will be conducted via visual inspection.
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Contact CrossFit and become an affiliate: $10,000, 2 weeks. Evaluation in this stage will occur via analysis of the companys responses, with a positive answer serving as the mark of success.
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Begin initial promotions with the help of CrossFit: $15,000, 3 months. Customer feedback, particularly on the Internet and social media, will serve as the primary method of evaluating the campaigns effectiveness.
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Hire coaches for the gym: $15,000, 2 months. The HR department of the company can handle parts of this process with the gyms management and apply its established monitoring and evaluation tools correspondingly.
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Purchase and install the necessary equipment: $10,000, 2 weeks. The acquisitions department will oversee the process, and the gym management will measure customer feedback upon using the tools and use it for future reference.
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Finalize the preparations and open the gym: $5,000, 2 weeks. During this time, management will try to discover any potential issues and address them before the opening of the facility. Afterward, it will collect customer feedback on aspects they liked and dislike and act on it.
Financial Projection
It should be noted that since the gym only offers one product, a separate sales forecast is unnecessary.
Detailed Annual Budget
Control Tools
Both the performance of the gym and the effectiveness of its marketing warrant continuous reviews. As can be seen in the projection, an adequate number of customers to make the gym profitable likely will not come in immediately after the gyms opening. As such, to succeed, it will need to attract additional visitors, whether through word of mouth or advertising. Its financial performance should be subject to review over every quarter and compared to the projection. If the gym is underperforming, additional marketing, as well as information gathering, are required. There is likely some issue that is hurting its performance and that the gym may be able to recover the losses after it is resolved.
It is critical to monitor marketing engagement by observing the interactions that its advertisements and social media accounts receive. It is possible to do so for traditional media by analyzing the number of viewers. For Internet-based services, there should be more detailed metrics available that can highlight the types of audiences that interact with the gyms promotions. Feedback gathering will also be possible on social networks, which should constitute a substantial portion of the brands presence. Based on the information obtained in these ways as well as surveys of current customers and how they have heard of the gym, the management can determine the most effective channels. Afterward, it can decide to try and imitate its successes in other media or focus on its most effective ones.
Conclusion
There appears to be substantial potential for profit in the enterprise in addition to its health benefits for company staff and the community. The absence of a CrossFit gym nearby creates an excellent opportunity to open a premium facility without incurring high equipment costs. It should target populations with high income and age of 25-34, which are not the main audience of traditional gyms. As such, while physical marketing is important, Internet-based advertising and a social network presence may be more beneficial in this case. The gym should pay for itself in the first three years of its existence, assuming it performs at or slightly below projections.
Works Cited
Fried, Gil, and Ceyda Mumcu, editors. Sport Analytics: A Data-Driven Approach to Sport Business and Management. Routledge, 2017.
Trugman, Gary R. Understanding Business Valuation: A Practical Guide to Valuing Small to Medium Sized Businesses. 5th ed., AICPA, 2017.
Consumer Price Index Summary. U.S. Bureau of Labor Statistics. 2020. Web.
The Business of CrossFit: An Update on New Market Research. Rally Fitness. 2017. Web.
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