Integrated Marketing Communications IMC Plan Assignment BX2082 Scenario #3 - Fitness 1 Your Role & the Company You have recently been appointed as the Marketing manager for a new chain of Fitness Centres that is to open three outlets in Singapore in three months time. At this stage you have one dedicated staff member allocated on a full time basis to assist you. This person has just recently graduated from university with a Business degree majoring in Marketing and has had two years part time experience working in a customer service and sales role for another fitness centre chain. The locations at which the three new Fitness Centres are to be situated have been strategically selected with one centre to be located close to the Singapore central business district (CBD) to cater to busy / affluent city based workers and the other two centres to be based in key suburban areas of your choice. Your assistant and yourself are currently renting temporary office space close to the location of the soon to open fitness centre and once those premises are opened office space is to be made available for you there. Marketing Objective – Year 1 The broad goal that has been set by the owners of the soon to be launched fitness centre chain is to have 13,000 members within the first twelve months of the fitness chains operations having commenced. Individual targets are for the two suburban centres to each have acquired membership bases of 3,500 and for the city based centre to have acquired 6,000 members. The proposed fitness centres will be more than just a fitness centre with the plan being that each centre will also have alongside it a café style outlet that in addition to serving and selling café style beverages and food [of a healthier nature] will also sell protein shakes and fitness supplements. In addition the centres will have an adjoining Health & Beauty Salon operation. Goals with respect to these two affiliated operations are that the café based outlets will return a 15% profit margin and that the profit margin for each of the Health & Beauty Salons for the first year will be 30%. The owners of the fitness centre chain are hoping that the success of these three centres will cement a platform from which they can open a further two centres of the same style within two years with possible expansion into Malaysia and Thailand also being a three to four year target. As such, a key responsibility that you are being charged with is that of building a positive image and strong level of brand awareness and identity in relevant target markets that will facilitate such expansion.Integrated Marketing Communications IMC Plan Assignment BX2082 Scenario #3 - Fitness 2 Background Information – The Owners The owners of the new fitness centre chain are Nigel Ratcliffe and Naomi Goh. Nigel and Naomi met five years ago when Nigel was visiting Singapore from the UK whilst competing in an international triathlon event. At the time Nigel had been competing on the international triathlon circuit for 6 years and Naomi was working as an assistant manager for a prominent fitness centre chain who were one of the sponsors of the event. Nigel finished third in the relevant triathlon and he met Naomi at the event’s prize award ceremony – it was love at first sight and Nigel moved to Singapore eight months later to be with Naomi. Nigel’s background is in sports and exercise science in which he completed an undergraduate degree in in the UK prior to becoming heavily involved in the competitive triathlon circuit throughout Europe and the UK initially and then internationally. Nigel is from a wealthy UK family and this wealth afforded him the luxury of being able to travel the globe competing on the international triathlon circuit. Between triathlon events Nigel worked as a personal trainer back in the UK but his engagement in this profession was more as a hobby than out of economic necessity. Naomi has lived in Singapore all her life and from a socio-cultural perspective would be described as being from a middle class family. She obtained a Bachelor of Business Administration degree from the National University of Singapore (NUS) in 1996. Naomi was always heavily into sport and fitness as a young girl and for a number of years during her teens represented Singapore at the state level for her age group in women’s soccer. Whilst studying for her degree she developed a passion for aerobics and trained to be an aerobics instructor - a profession she worked in to pay her way through university. Upon completion of her degree one of the fitness centres in which she worked offered her an administrative position. Since then she has worked with three different fitness centre chains in managerial / administrative roles, taken time out from work to have two children in her former marriage and successfully completed an MBA studying part time, once again at NUS. Nigel has recently become the benefactor of a substantial inheritance and he is using 50% of this money along with funds from a bank loan acquired jointly with Naomi for an equivalent sum, to finance the new business venture. Both Nigel & Naomi have for many years shared a common dream, that being to own and run a fitness centre, and with Nigel’s inheritance now seems an opportune time for them to do so. Nigel and Naomi are not married but live in a defacto relationship with Naomi’s two children from her previous marriage who are now in their early teens. Both Nigel and Naomi are aged in their early 40s. Important Decision – Naming the new Fitness Centre chain Nigel & Naomi have struck a bit of a dilemma in choosing the name to use for their new Fitness Centre chain. Basically they have come up with four different names and are having trouble agreeing on which one to choose. As one of your first tasks they have asked you to choose from the four names the one that you feel will provide the strongest brand name for their new business venture. The first name that they came up with, which was initially Nigel’s idea, but which Naomi is quite enthusiastic about is ‘3D Fitness’ as in three dimensions. This brand name fits nicelyIntegrated Marketing Communications IMC Plan Assignment BX2082 Scenario #3 - Fitness 3 with the fact that each centre will have three dimensions forming the whole, the fitness centre plus the adjoining café and health and beauty spas. This prospective brand name also has the potential to tie in with different dimensions so far as health and fitness are concerned and these might be imaginatively built into advertising slogans . A key reason that Nigel is keen on this brand name is that when he was competitively involved in triathlon his personal mantra was ‘determination, dedication and desire’, his 3Ds of personal success, and he sees these as being core values that could be built into the brand from a marketing perspective. In discussing this naming option of 3D Fitness they have also contemplated the offshoot name of ‘Dimensions Fitness’ The third brand name that is being seriously considered came about quite accidentally as a result of Naomi’s overhearing her 13 year old son and one of his friends playing with some toys that had recently become popular - Ninjago Lego. One of the powers that the Lego ninjas take on is known as ‘NRG’ and this NRG power got Naomi thinking about the possibility of ‘NRG Fitness’ as a brand name. The two appealing lines of thought here being the obvious sound based link between NRG and the word Energy a semi- clever text speak style play on letters. The second reason underlying the appeal of NRG is the fact that it consists of Naomi’s and Nigel’s initials combined, NR as in Nigel Ratcliffe and then the G on the end as in Naomi’s surname Goh. The fourth name being considered emerged when Nigel and Naomi were brainstorming ideas for the associated Fitness Cafe and in discussing the concept of the Protein Shakes they both simultaneously came up with the name ‘Shape n Shake Fitness’ which does a nice job in blending the cafe / social space with the core aspect of the business the fitness centre itself. As mentioned in the lead into this section Nigel & Naomi have charged you with the responsibility of choosing the brand name to be used from these four ideas / concepts which they are having difficulty deciding between. Planned Facilities As mentioned above, all of the new centres will consist of the fitness centre / gym as their core and the associated fitness café and health and beauty salons as complimentary extensions. Fitness Centres / Gym Each of the fitness centres will consist of five key areas a cardio fitness area consisting of treadmills, exercise bicycles, stepper machines and rowing machines. A second area will be the gym equipment area which will house between 30 – 40 weights based exercise stations. There will also be a free weights area which will comfortably cater to 20 - 25 users at any one time. The fourth area will consist of two rooms dedicated to aerobic exercise classes, the larger of these, providing open floor space that can cater to class sizes of 50 and the second being a smaller room in which spin / RPM classes [exercise classes on exercise bikes] take place with 15 – 20 bikes plus the instructor’s exercise bike in this area. The fifth area will be a stretching room in which floor exercises and pre and post exercise stretches can be conducted this room having the capacity for 10 – 15 people comfortably at a time.Integrated Marketing Communications IMC Plan Assignment BX2082 Scenario #3 - Fitness 4 The cardio fitness area will be equipped with machines leased from leading cardio equipment provider True Fitness. It is planned that each cardio area will house 10 -12 treadmills, 8 exercise bikes, 8 stepper machines and 6 rowing machines. With the exception of the rowing machines all of this equipment will feature in-built TV screens as an option that can be activated in the display console. These screens will have the capacity for users to view and listen to TV programs or their own I-pod / MP 3 player videos using their own earphones / headsets. Six 50 inch flat screen LCD TVs will also be mounted on the feature wall within the cardio areas to provide further entertainment to members exercising in this area. These TVs along with those accessible via the equipment consoles will have access to the full range of free to air TV stations available plus a selection of sport & music oriented Pay TV stations. The gym equipment / exercise machine area will be equipped with the latest equipment from leading gym equipment provider Healthstream. In most instances there will be two to three offerings provided with respect to the more popular pieces of gym equipment. As with the cardio fitness area the exercise equipment to be utilised in this area will be leased direct from the manufacturer. There will also be a number of strategically positioned 50 inch flat screen LCD TVs mounted high on the walls in this area and the free weights area facilitating visibility of at least one screen from all parts of these two adjoining areas. Equipment provided in the free weights area, main aerobics room and stretching rooms will be purchased up-front by the fitness centre chain. The exercise bicycles to be located in the dedicated spin / RPM room will be leased from True Fitness in conjunction with the leasing of the other exercise equipment located in the cardio fitness area. All of the fitness centres will be equipped with appropriately sized change rooms, within which lockers will be available, along with toilets and shower facilities. The change rooms will facilitate people being able to come to the fitness centre straight from or on their way to work and change / freshen up as necessary following their workout. The suburban fitness centres will also have a space dedicated to the operation of a crèche / child minding service between 8.30 am – 3.30 pm. This facility will cater to children between the ages of 1 ½ – 6. Parents will be able to leave their young children, supervised by a qualified carer, in the crèche for a period of up to two hours. The crèche will cater to a maximum of 20 children at a time and as such pre-bookings are necessary. The crèche service will require members and guests to pay a fee of $8 per hour per child or alternatively members can pay a levy of $300 above their annual membership fee to access this service on an unlimited basis. During non-staff supervised hours each of the suburban fitness centre operations will have closed circuit TV monitoring taking place which is fed through to a locally contracted security firm. If patrons feel threatened or concerned during these out of hours times there will be intercom style speakers that can be used to contact the relevant security firm. Fitness Café The key idea behind having an adjoining café within / alongside the fitness centre itself is to create a social space in which members can mix and mingle after their fitness classes / workout. Another key reason for providing this extra dimension is that it will help to furtherIntegrated Marketing Communications IMC Plan Assignment BX2082 Scenario #3 - Fitness 5 differentiate the proposed fitness chain from its competitors by adding more of a social emphasis to the club’s operation. The café will serve café style beverages, sports drinks and healthy snacks & meals targeted to health and fitness conscious patrons. It is anticipated that the sale of beverages will be the mainstay of this operation. A speciality of the café’s will be the sale of a range of protein shakes specially prepared on the premises full of energy boosting ingredients. The café will also act as a retail outlet selling fitness / energy supplements and act as a shop front for the online sale of gym and fitness apparel with samples of popular items on display. This online shopping arrangement will be facilitated via an existing operator specialising in this area with the fitness centre / café receiving 10% commission on orders that it places on behalf of its members. The cafés will have the capacity to seat between 24 – 32 guests and will be manned by two to four staff dependant on demand. Health and Beauty Salons A third dimension to the fitness centres operations will be its affiliated health and beauty salons. Members of the fitness centre will be entitled to a 10% discount on all treatments that are not subject to any other special offers. Treatments available through the health and beauty salons will include; therapeutic massage, body bronzing, waxing, tinting, facial treatments, body treatments, exfoliation, manicures, pedicures and various indulgence packages based on a combination of the previously mentioned services. Opening Times / Trading Hours Fitness Centre / Gym One of the key selling points of the new fitness chain will be its flexible operating hours. The two suburban based centres will offer 24/7 access / membership based on a swipe card entry system along with casual visit and a 10 visits pass option being available during staff supervised hours. Staff supervised hours for the suburban centres will be from 6.30am in the morning through until 8.30pm in the evening Monday to Friday [excluding Public Holidays] plus 8.00am to 4.00pm on Saturdays. At the suburban centres a variety of aerobics based classes will be offered throughout the day Monday to Friday, at the class times of 6.30am – 7.30, 7.30 – 8.30, 10.00 – 11.00, 12.30 – 1.30, 1.30 – 2.30, 5.30 – 6.30, 6.30 – 7.30, 7.30 – 8.30pm. On Saturdays classes will be offered from 9.30am – 10.30am and from 2.30pm – 3.30pm. The city based fitness centre will have extended operating hours Monday to Friday [excluding Public Holidays and Weekends] that are designed to fit with members work hours, with the centre opening at 6.00 am and closing at 9.00pm.Integrated Marketing Communications IMC Plan Assignment BX2082 Scenario #3 - Fitness 6 Aerobics based classes will be offered at the city based fitness centre on a Monday to Friday basis from 6.15am – 7.15, 7.15 – 8.15, 12.15 – 1.00, 1.00 – 1.45, 5.30 – 6.30, 6.30 – 7.30 and 7.30 – 8.30pm. Aerobics based classes across all locations will include Body Balance, Body Attack, Body Pump, Body Combat, Body Step, Zumba, ShBam, Spin, RPM, Pilates, Yoga and Tai Chi. Fitness Café The café in fulfilling its role as a social hub at which members can mix and mingle will open one hour after the staff supervised hours for the suburban fitness centres commence and remain open until the end of the staff supervised hours for the centre. Hence opening hours Monday to Friday will be 7.30am through to 8.30pm and on Saturday 9.00am – 4.00pm. With respect to the city based fitness centre the café will be open between 7.00am – 8.00pm. Junior staff employed in the cafés will be assigned to gym equipment related cleaning duties during those segments of their shift that the cafés are experiencing low customer volumes. The café’s will serve light meals suitable for breakfast, lunch & dinner at the respective periods of the day, catering to those who have busy schedules and wanting to get a quick nutritional boost following their exercise session. The city based Fitness Café will offer an expanded healthy options menu so as to attract passing trade from nearby office workers. The city based café will also be slightly larger than the suburban based equivalents catering for up to fifty seated customers. Health & Beauty Salon Hours of operation for the suburban based Health and Beauty Salons will be 9.00am – 5.00pm Monday to Wednesday plus Friday , 9.00 am to 8.00pm Thursday and 9.00am to 4.00pm on Saturday with the facility closed on Sundays. With respect to the city based Health & Beauty Salon operating times will be from 8.00 am in the morning until 8,00pm in the evening so as to appeal to city based workers looking to have such treatments done before and after work. It is anticipated that the suburban based Health & Beauty Salons will need to operate with up to six beauty therapists being available during peak times and three at other times. As such the staff hiring plan with respect to this part of the operation is to have a pool of 10 – 12 trained beauty therapists on staff for each location, four of whom will be full time employees and the remainder employed on a casual basis. Among the four full time staff, two will need to be senior / experienced beauty therapists with the ability to jointly manage the operation. With respect to the city based Health & Beauty Salon it is anticipated that 1 ½ times the above noted number of staff will be required, given anticipated higher customer volumes and extended trading hours during the week.Integrated Marketing Communications IMC Plan Assignment BX2082 Scenario #3 - Fitness 7 Fitness Centre Pricing Plan In order for the core operation of the Fitness Centre to maximise revenue and provide value to its members and casual visitors it will need to offer varying membership plans and casual / short term visitation pricing options. Due to higher rental costs associated with the city based fitness centre higher fees / prices will need to charged to those utilising that centre. This can be justified in terms of the value associated with the convenience of the centre in terms of its close proximity to member’s workplaces. Patrons taking out membership at the city based fitness centre, will as part of their membership, also be entitled to 24/7 access to the four suburban centres. City based centre pricing Joining Fee $125 Weekly payment $24.90* minimum contract = 12 months [total cost $1295 + joining fee = $1,420] Weekly payment* made via authorised direct debit from nominated bank account Annual membership paid upfront = $1,195 [includes joining fee] Six Months paid upfront = $695 [includes joining fee] Casual Visit $25 10 Visit Pass $200 [must be used within two months of purchase date] NB: City centre membership entitles holder to 24/7 access to suburban centres Suburban centres pricing Joining Fee $95 Weekly payment $19.90* minimum contract = 12 months [total cost $1035 + joining fee = $1,130] Weekly payment* made via authorised direct debit from nominated bank account Annual membership paid upfront = $960 [includes joining fee] Six Months paid upfront = $550 [includes joining fee] Casual Visit $20 10 Visit Pass $180 [must be used within two months of purchase date] NB Casual & 10 Visit Pass only facilitate entry during staff supervised centre opening hours NB: Suburban centre membership entitles holder to 24/7 access to all other suburban centres – it does not, however, provide the member with access to the city based centre. As an incentive to renew their membership agreements at the expiry of the 12 month period direct debit payment based members are offered a new contract with a $2.00 per week deduction in fees each subsequent year of renewal through until the third renewal. The provision of the casual visit and 10 visit pass options provides a ‘try before you buy’ option to those prospective customers considering taking out a full membership. Another advantage that these two shorter term offers provide is that they facilitate an additional revenue stream in terms of people who are visiting the area on a short term basis. The 10 visit passes can also be purchased by members in the form of a gift voucher package redeemable by the nominated recipient. Members receive a 10% discount when they purchase one of these gift packs.Integrated Marketing Communications IMC Plan Assignment BX2082 Scenario #3 - Fitness 8 Competitive Environment The fitness centre, café and health and beauty salon lines of business are all very competitive service provider sectors in the designated locations. However the combination of these three styles of facility under the one umbrella in a shared location is unusual / unique and has the potential to resonate in the marketplace on the basis of the convenience that the clustering of such service outlets might provide. It should be noted that the new fitness centres’ membership fees and casual visitation charges will be at the higher price range end of the market. This pricing is justified by the fact that these centres will be equipped with newest state of the art cardio and gym based equipment and will be offering aerobics classes taken by experienced and highly regarded instructors. In addition to these factors the fitness centres will also have on staff during peak periods a minimum of two personal trainers to assist and guide members during their workouts. Additionally the same team of personal trainers will be available for private and group based training sessions at discounted rates of 15% off to club members [pre-bookings required]. IMC Budget The Advertising and Promotional budget at your disposal for Year 1 is $1.5 million.  From which salaries; yours and your assistant = $150,000 [15 months]  Rental of Office Space, Furniture, Computer & Other Equipment [first 3 months] = $5, 000 will need to be deducted. - Leaving approximately $1.3 million for additional expenditure as you see fit - Year 1 in the context discussed here relates to a fifteen month period, that consists of three months leading up to the opening of the fitness centre chain and the first twelve months of its operation. Current Situation Premises for the three fitness centres and their adjoining café / health & beauty salons have been found and finalised, with the relevant contracts signed off on last week. Contracts with respect to leasing the relevant cardio and gym based exercise equipment have also been agreed to and signed off on. Lead staff to oversee the fitness café and health & beauty salon operations will be employed in one month’s time. The two suburban centres will all be located in retail precincts that are within 5 minutes walking distance from MRT stations and main commercial centre. In each instance a sufficient number of adjoining retail spaces have been secured to facilitate the planned operation and in all instance the retail precincts provides adequate customer parking.Integrated Marketing Communications IMC Plan Assignment BX2082 Scenario #3 - Fitness 9 The assignment: IMC Plan [report]. Please refer to the Assignment Details document posted to the subject’s Learn JCU site in the ASSESSMENT area for details with respect to the required structure and layout of your report. NB: This is a fictitious scenario and any parallels to real individuals or newly established or planned businesses in the relevant arena are coincidental. The scenario has been written based on its author [the subject coordinator’s] many years of frequenting fitness centres and observations / ideas that he has developed as a consequence of that experience.